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introduction  iy  Tow 


MONEY  MAKING  IN 
FREE  AMERICA 

Short  Chapters  on  Prosperity 


By 
BOLTON  HALL 


Author  of 

"The  Game  of  Life,"  "A  little  Land  and 
A  Living,"  etc. 


Introduction  by 
TOM  L.  JOHNSON 


NEW  YORK 

THE  ARCADIA  PRESS 

1909 


Copyright,  1909, 
By  the  ARCADIA  PRESS 


DEDICATION 

To  all  those  who  are  poor,  and  wish  to  become  rich;  or 
who  are  rich,  and  wish  to  become  richer,  this  book  is 
dedicated. 


CONTENTS 

CHAPTEB  PAGE 

Purpose  of  this  Book 9 

Introduction,  Tom  L.  Johnson 13 

I.  The  Promise  of  the  Century   ....  17 

II.  Our  Present  Drift 25 

III.  Over-Production 36 

IV.  Wages    Instead   op   Product      ....  50 

V.  Who  Gets  the  Wealth  Produced?      .      .  63 

VI.  Monopolized  America 76 

VII.  Trusts — Useful  or  Harmful     ....  94 

VIII.  Railway  and  Franchise  Monopoly     .      .  114 

IX.  How  it  Hurts  You 133 

X.  To  Business  Men 139 

XI.  The  Fruits  of  Injustice 148 

XII.  The  Charity  Problem l64 

XIII.  Temperance 184 

XIV.  Money   Reforms 194 

XV.  Trades  Unions  and  their  Remedies     .      .  206 

XVI.  Political  Corruption 220 

XVII.  Income  and  Inheritance  Taxes     .      .      .  230 

XVIII.  High  Tariff   Reform 239 

XIX.  How    the    Farmers    can    Become    Pros- 
perous         257 

XX.  What  We  Want  and  How  to  Get  It       .  269 

XXI.  Your  Own  Success 287 

XXII.  The  Hope  of  Future  Progress       .      .      .  296 
Appendix — Annual    Production    of    Wealth    in 

United    States 311 


INTRODUCTION 

Great  as  is  the  struggle  for  privilege  and 
power  in  our  strenuous  American  life,  there  are 
probably  few  who  would  not  prefer  an  assured 
living  and  a  fair  competence  to  the  chance  of  an 
overgrown  fortune. 

The  author  of  "Money  Making  in  Free 
America  "  as  a  business  man,  lawyer,  speculator, 
landlord  and  reformer,  has  had  large  opportuni- 
ties of  observation,  and  believes  that  monopoly  is 
the  main  obstacle  to  such  enlarged  and  contented 
living  for  the  multitudinous  millions  of  America. 
He  submits  a  sort  of  agreed  statement  of  facts 
to  the  American  people  for  judgment. 

On  the  ethical  side,  it  is  true  that  unenlight- 
ened selfishness  is  the  father  of  monopoly,  but 
selfishness  is  also  the  child  of  oppression;  both 
should  be  attacked  by  education.  Whether  we 
may  agree  with  all  of  the  author's  conclusions 
and  approve  liis  remedy  or  not,  whether  we  stop 
short,  or  go  further  than  he  does,  all  will  admit 


10  INTRODUCTION 

that  monopoly  is  an  important  factor  in  our  so- 
cial problem  and  that  its  consideration  is  one  of 
our  most  important  and  most  pressing  duties. 

It  is  to  be  wished  that  all  those  who  offer  us 
facts  and  figures  on  which  to  test  their  conclu- 
sions or  to  base  our  own  would  be  as  careful  as 
Mr.  Hall  is  in  giving  us  the  source  and  authority 
from  which  they  are  taken  and  by  which  they 
may  be  verified. 

I  have  known  Mr.  Hall  for  many  years  and 
regard  him  as  absolutely  rehable  in  all  his  state- 
ments. He  is  not  only  pointing  out  the  far- 
reaching  effects  of  privilege  and  monopoly  on 
our  social  institutions,  but  he  suggests,  in  my 
opinion,  the  only  remedy. 

I  bespeak  for  his  works  the  consideration  that 
a  man  should  receive  who  has  made  heroic  sacri- 
fices for  the  cause  he  holds  dear. 

Tom  L.  Johnson, 

Cleveland^  Ohio. 


THE    PURPOSE   OF    THIS   BOOK 

THIS  book  is  not  an  appeal  merely  to 
thoughtful  people,  for  the  great  majority 
of  men  do  not  think.  It  does  not  urge  serious 
study  of  the  great  problems  for  which  a  solution 
is  given,  for  the  average  man  never  seriously 
studies  any  question.  It  is  not  an  address  to 
the  sympathetic  and  unselfish,  for  people  as  a 
rule  are  selfish,  and  somewhat  indifferent  to  the 
condition  of  their  fellow  men.  It  is  not  a  plea 
for  human  rights  now  denied  by  our  laws :  those 
abstractions  have  too  little  weight  in  the  prac- 
tical affairs  of  life.  It  does  not  present  existing 
conditions  as  resulting  from  a  conspiracy  of  the 
few  against  the  many.  The  evils  of  the  present 
social  system  are  due  to  the  ignorance  of  the 
many  and  of  the  few.  It  does  not  assume  that 
mankind  is  divided  into  good  people  and  rogues. 
There  are  two  classes ;  but  they  are  the  reflecting 
people  and  the  unreflecting. 

This  book  aims  to  convince  the  unminding 
millions  that  injustice  is  never  to  their  interest. 
It  has  no  theory  to  prove,  nor  does  it  advocate 


THE    PURPOSE  10 

OF    THIS    BOOK 

any  social  reform  hobby.  It  shows  just  why 
a  great  many  work  hard,  in  order  that  one  may 
hve  without  working.  It  does  not  attack  wealth 
or  property:  it  shows  that  we  ought  to  have  far 
more  property  than  we  have  now,  and  how  un- 
derstanding its  economics  will  help  each  one  to 
get  it.  It  appeals  to  no  lofty  sentiment,  but 
bases  its  arguments  on  the  sure  ground  of  plain, 
ordinary  selfishness.  It  indulges  in  no  rhetorical 
fancies.  It  does  not  denounce  existing  institu- 
tions as  monuments  of  wickedness.  It  points  to 
them  as  marvels  of  thoughtlessness.  It  does  not 
say:  "Do  this  and  you  will  establish  an  ideal 
civilization,"  but:  "Do  this  and  all  may  become 
rich."  In  short,  it  recognizes  the  fact,  admitted 
by  all  except  dreamers,  enthusiasts  and  imprac- 
ticable idealists,  that  people  have  one  aim  in 
common,  which  is,  to  get  wealth.  It  maintains 
that  this  aim  is  not  a  mean  one,  but  the  necessary 
foundation  for  progress,  in  education,  the  arts, 
sciences,  and  all  else  that  distinguishes  the  man 
of  culture  and  refinement  from  the  primitive 
barbarian.  It  exalts  the  wise  production  and 
distribution  of  wealth  as  the  chief  social  good. 


11  THE    PURPOSE 

OF    THIS    BOOK 

The  reception  accorded  to  the  first  draft  of 
this  book  indicates  that  Americans  will  welcome 
this  attempt  to  set  forth  as  simply  as  possible 
the  causes  which  prevent  them  from  enjoying 
the  wealth  to  which  their  industry  and  skill  en- 
title them. 

The  man  who  dreams  of  attaining  a  Utopia 
by  attempts  to  conform  to  an  abstract  moral  law, 
will  find  little  of  interest  in  these  pages.  The 
practical  man  of  common  sense,  who  knows  that 
riches  are  not  to  be  had  through  dreams  of  right- 
eousness, will  find  here  much  that  will  profit  him 
in  his  affairs.  If  he  will  keep  in  mind  the  facts 
of  this  book,  he  will  certainly  become  more  pros- 
perous. If  he  ignores  them,  he  will  continue  to 
suffer  from  the  evils  of  which  he  complains ;  but 
he  will  at  least  have  the  satisfaction  of  knowing 
that  the  ignorance  of  himself  and  his  fellows  is 
responsible  for  his  condition.  He  can  no  longer 
blame  the  decrees  of  Providence,  or  the  heart- 
lessness  and  greed  of  those  who  profit  by  his 
neglect. 

I  do  not  mean  that  self-interest  is  the  greatest 
motive  to  which  men  desirous  of  reform  can  ap- 


THE    PURPOSE  13 

OF    THIS    BOOK 

peal.  On  the  contrary,  every  improvement  in 
the  condition  of  mankind  has  been  promoted  by 
the  sympathy  of  the  rich,  or  at  least  of  the  well- 
to-do,  with  their  less  fortunate  fellow  men  suf- 
fering from  the  miseries  due  to  involuntary 
poverty.  It  is  to  the  pitying  self-sacrifice  of 
thousands  of  high-minded  men  and  women  that 
we  owe  the  sentiment  in  favor  of  radical  re- 
forms, which  is  manifest  everywhere  to-day. 

Yet  as  the  purpose  of  this  book  is  to  hasten 
the  removal  of  the  artificial  barriers  with  which 
men  in  their  ignorance  have  shut  themselves  out 
of  opportunities  for  happiness,  I  use  such  argu- 
ments as  appeal  to  the  largest  number. 

With  those,  who  choose  to  work  for  the  same 
end  by  appealing  to  righteousness  and  justice 
I  have  no  quarrel.  I  shall  be  satisfied  if  this 
book  leads  even  a  few  to  believe  that  as  a  matter 
of  expediency  our  social  system  should  be 
changed  on  the  general  lines  laid  down  in  the 
following  pages. 

BOLTON    HALL, 

33  East  6lst  St.,  New  York. 


MONEY  MAKING  IN  FREE  AMERICA 


CHAPTER   I 

THE    PROMISE    OF    THE    CENTURY 

WHEN  the  thirteen  colonies  along  the  At- 
lantic coast  became  the  United  States  of 
America,  they  gave  brighter  promise  for  the 
development  of  a  great  and  prosperous  nation 
than  any  country  in  the  world,  at  any  period  in 
history.  All  the  conditions  were  favorable  for 
rapid  growth  in  population,  wealth  and  intelli- 
gence. The  men  who  had  fought  against  foreign 
oppression  which  prevented  their  prosperity, 
looked  forward  to  a  grander  Commonwealth 
than  the  world  had  ever  seen.  Not  only  did  they 
believe  that  their  country  would  become  greatest 
in  numbers  and  wealth,  but  that  the  principles 
on  which  its  government  was  founded  would 
make  it  also  the  freest  of  nations.  The  despot- 
ism of  nobility  and  thrones  which  ruled  the  peo- 
ples of  Europe  was  left  behind,  and  in  free 
America  all  men  were  to  have  equal  rights. 
There  were  to  be  no  privileged  classes  subsisting 

17 


MONEY   MAKING  18 

IN    FREE    AMERICA 

on  the  labor  of  the  masses,  but  each  man  was  to 
enjoy  the  fruits  of  his  own  exertion.  The  laws 
were  to  be  made  by  representatives  of  the  people 
instead  of  by  hereditary  rulers,  and  were  to  be 
alike  for  rich  and  poor.  JNIen  were  not  to  be  di- 
vided into  castes,  as  in  the  Old  World,  but  were 
to  prosper  according"  to  their  character,  ability 
and  efforts,  and  the  highest  position  was  to  be 
open  to  men  of  the  humblest  rank.  Here  in  a 
virgin  continent  was  to  be  the  fullest  expression 
of  perfected  humanity,  with  literature,  art  and 
science  crowning  the  structure  of  material  great- 
ness. 

Nor  were  these  expectations  merely  the  fond 
hopes  of  theorists  who  fancied  that  a  change  in 
the  form  of  government  would  create  an  ideal 
society.  They  were  based  on  the  facts  of  all 
human  experiences,  from  which  alone  predic- 
tions for  the  future  could  be  made.  The  fathers 
of  the  Republic  knew  that  the  scattered  colon- 
ists had  prospered  and  grown  strong  because 
their  condition  was  freer  than  in  the  countries 
of  their  birth.  They  knew  that  the  poverty  and 
degradation  of  Europe  were  due  to  the  tyranny 


19  MONEY    MAKING 

IN    FREE    AMERICA 

of  kings  and  nobles  and  privileged  classes.  They 
knew  that  the  great  nations  of  the  past  had 
fallen  because  they  were  founded  on  inequity 
among  men.  They  knew  that  only  in  a  govern- 
ment proceeding  directly  from  the  people  could 
be  found  a  safeguard  for  popular  rights.  And 
having,  as  they  believed,  provided  against  all  the 
bad  institutions  of  other  countries,  they  were 
confident  that  they  had  assured  to  their  posterity 
the  blessings  of  liberty  and  equality. 

Equally  well  founded  were  their  expectations 
of  material  prosperity.  Although  but  partly  ex- 
plored, the  new  republic  was  known  to  possess 
the  natural  resources  necessary  for  carrying  on 
every  branch  of  industry.  With  immense  areas 
of  fertile  soil,  extending  from  the  rich  cotton 
and  rice  bottoms  of  the  South  to  the  wheat  and 
grazing  prairies  of  the  North;  with  vast  forests 
of  the  finest  timber;  inexhaustible  deposits  of 
coal,  iron,  copper  and  other  minerals;  and  with 
great  rivers  and  lakes  forming  natural  water- 
ways for  transportation,  every  requisite  ap- 
peared for  the  support  of  unlimited  numbers  of 
people.    With  a  temperate  and  healthful  climate 


MONEY    MAKING  30 

IN    FREE    AMERICA 

which  made  exertion  aoreeable,  there  was  no 
obstacle  to  the  development  of  the  whole  area 
controlled  by  the  federated  States. 

Not  less  important  than  natural  resources  as 
a  factor  in  the  future  of  the  country,  was  the 
character  of  the  four  millions  of  people  already 
within  its  borders.  Mainly  of  Anglo-Saxon 
stock,  the}"  were  either  the  more  adventurous 
spirits  of  the  Old  World,  or  their  descendants. 
Strong,  hardy,  and  energetic,  they  had  battled 
with  savages,  and  with  the  primeval  wilderness, 
and  had  come  out  victorious.  Their  first  suc- 
cesses encouraged  them  to  greater  efforts,  and 
each  year  saw  the  outposts  of  the  pioneer  pushed 
farther  and  farther.  In  the  new  settlements 
sprang  up  the  public  school  and  the  newspaper, 
evidences  of  the  popular  desire  for  knowledge 
as  well  as  for  wealth.  Education  kept  pace  with 
each  step  in  material  progress. 

With  such  a  country,  and  such  a  people,  there 
was  abundant  reason  for  the  general  confidence 
that  the  United  States  would  at  no  distant 
period  be  the  wonder  of  the  world. 

These    expectations    of    material    prosperity 


21  MONEY    MAKING 

IN    FREE    AMERICA 

have  been  realized.  The  thirteen  States  have 
grown  to  forty-six,  embracing  the  territory 
from  the  Atlantic  to  the  Pacific  and  from  the 
Great  Lakes  to  the  Gulf  of  Mexico.  Our  popu- 
lation has  increased  from  four  millions  to  eighty- 
six  millions.  The  total  wealth  is  now  estimated 
at  $110,000,000,000.  There  were  5,737,372 
farms,  in  1900,  valued,  with  improvements,  ma- 
chinerj^  and  live  stock,  at  twenty  billion  dollars.* 
The  total  value  of  farm  products  was  $3,742,- 
000,000.  This  is  the  census  estimate,  and  is  un- 
doubtedly too  low. 

In  everything  for  the  most  efficient  produc- 
tion and  distribution  of  wealth,  the  United 
States  is  easily  first  of  nations.  The  total  horse- 
power of  the  steam  and  other  machinery  used  in 
manufacturing  and  transportation  is  three  times 
as  large  as  that  of  any  other  country.  The 
512,276  manufacturing  establishments,  with  a 
capital,  as  stated  by  themselves,  of  over  $9,800,- 
000,000,  produced  goods  valued  at  $8,370,000,- 
000  (net)  ;  they  reproduced  in  a  single  year  the 

*  Moody's  Magazine  for  May,  1908,  estimates  the  farm  prop- 
erty at  twenty-seven  billion  dollars. 


MONEY   MAKING  Sd 

IN    FREE    AMERICA 

whole  amount  of  their  actual  capital.  The 
product  of  fisheries  was  probably  $50,000,000. 
The  product  of  mineral  industries  was  over  $1,- 
200,000,000.*  The  railroad  mileage  has  grown 
from  nothing  one  hundred  years  ago  to  more 
than  two  hundred  thousand  (225,584)  miles, 
equal  to  seventy-five  lines  across  the  continent, 
carrying  annually  800,000,000  passengers,  equal 
to  about  half  the  population  of  the  world,  and 
1,600,000,000  tons  of  freight. 

All  other  departments  of  trade  and  industry 
have  shown  equally  remarkable  growth,  the  gen- 
eral use  of  improved  machinery  making  the  out- 
f)ut  of  wealth  far  greater  per  capita  than  at  any 
time  in  history. 

Similar  examples  of  development,  though  to  a 
much  lesser  extent  than  in  the  United  States, 
might  be  shown  in  Australia,  New  Zealand  and 
in  the  Ai'gentine  Republic,  which  have  rapidly 
increased  in  population  and  wealth  during  the 

*  For  an  analysis  of  the  census  figures  of  production,  see 
appendix. 

The  statistics  used  throughout  this  hook  are  for  the  "conti- 
nental" United  States  only;  including  Alaska,  hut  excluding 
our  island  possessions.  The  figures  for  1900  are  therefore  com- 
parable with  those  of  previous  censuses. 


23  MONEY    MAKING 

IN    FREE    AMERICA 

past  fifty  years,  and  are  becoming  great  com- 
monwealths. Those  countries  and  this  country 
have  prospered  just  in  proportion  as  there  were 
free  opportunities  for  increasing  numbers  of 
people  to  work  for  themselves.  They  have  pros- 
pered because  the  people  have  not  been  burdened 
with  a  privileged  aristocracy,  state-established 
churches  or  "  divinely-appointed  "  rulers.  But 
chiefly  they  have  prospered  because  of  immense 
areas  of  fertile  soil  which  were  open  to  all  who 
would  settle  on  them. 

It  is  no  wonder  that  so  many  of  the  workers 
of  Europe,  restricted  by  tyrannical  laws,  de- 
graded by  class  oppression,  forced  to  sell  their 
labor  at  the  lowest  wages  that  will  sustain  life, 
are  justly  described  as  "  pauper  labor."  Yet 
when  these  paupers  are  transplanted  to  freer 
conditions  they  quickly  develop  into  intelligent, 
independent,  self-respecting  men  and  women. 
As  the  press  dispatches  quote  President  Roose- 
velt at  Oyster  Bay,  July,  1908:  "We  have  this 
country  what  it  is  because  we  have  measurably 
succeeded  in  securing,  in  the  past,  equality  of 
opportunity  here."     There  is  no  magic  in  soil 


MONEY    MAKING  24 

IN    FREE    AMERICA 

or  climate:  the  difference  is  in  the  change  from 
the  strangling  influence  of  restrictive  laws  to 
the  natural  opportunity  for  growth.  The  propo- 
sition that  greater  freedom  means  greater  pros- 
perity, and  therefore  greater  intelligence  and 
higher  civilization,  cannot  be  disputed.  We  know 
it  is  so,  because  we  have  seen  it  for  ourselves. 


CHAPTER    II 

OUR     PRESENT    DRIFT 

PROFESSOR  HUXLEY,  in  an  article, 
"Government:  Anarchy  or  Regimenta- 
tion," published  in  Nineteenth  Century  for 
May,  1890,  expressed  himself  as  follows: 

"  Even  the  best  of  modern  civilizations  appears  to  me  to 
exhibit  a  condition  of  mankind  which  neither  embodies  any 
worthy  ideal  nor  even  possesses  the  merit  of  stability.  I 
do  not  hesitate  to  express  the  opinion  that  if  there  is  no 
hope  of  a  large  improvement  in  the  condition  of  the  greater 
part  of  the  human  family;  if  it  is  true  that  the  increase  of 
knowledge^  the  winning  of  a  greater  domain  over  nature 
which  is  its  consequence^  and  the  wealth  which  follows  upon 
that  domain  are  to  make  no  difference  in  the  extent  and  in- 
tensity of  want,  with  its  concomitant  physical  and  moral 
degradation  among  the  masses  of  the  people,  I  should  hail 
the  advent  of  some  kindly  comet  which  would  sweep  the 
whole  affair  away  as  a  desirable  consummation." 

Magnificent  as  are  the  results  we  have  re- 
viewed, they  nevertheless  fall  far  behind  what 
they  ought  to  have  been.  There  is  a  darker  side 
to  the  picture,  one  which  the  founders  of  the 

25 


MONEY   MAKING  !26 

IN    FREE    AMERICA 

Union  would  not  have  believed  could  exist  along 
with  such  tremendous  increase  of  wealth.  While 
the  standard  of  living  of  the  people  as  a  whole 
has  been  raised  far  above  the  standard  of  Revo- 
lutionary times  and  higher  than  that  of  any 
other  country,  wide  inequalities  have  grown  up 
which  threaten  the  Republic.  For  although  the 
production  of  wealth  has  rapidly  increased,  its 
distribution  is  unequal  and  unreasonable.  Even 
fifteen  years  ago  9  per  cent,  of  the  people 
owned  over  71  per  cent,  of  the  total  property 
of  the  country,  while  52  per  cent,  of  the  people 
owned  only  5  per  cent,  of  the  property.  ( George 
K.  Holmes;  Political  Science  Quarterly,  1893.) 
This  shows  to  the  eye  the  disproportion: 

RICH  own  PROPERTY 

*********  ********** 

********** 

*sl/  sL"  jA*  >U.  jOt  'Jt  'd£,  *]£,  jJt 

*\i/        %!/        \i^       ^       "A-        -Jt       "A-       jX"        •ie, 
7^      ^      Tf*       TfC      yfc      ^      ^      Tf*       yfc 

********** 


^1 


MONEY    MAKING 
IN    FREE    AMERICA 


POOR 

^      ^      ^      ^      ^      ^      j|^      ^      ^      ^ 

Or  again: 
PROPERTY  OF  RICH 

PROPERTY  OF  POOR 


own  PROPERTY 

4e.      ^      ^      ^      ^ 


NUMBER  OF  RICH 


NUMBER  OF  POOR 


Instead  of  an  equitable  division  of  wealth  ac- 
cording to  each  man's  part  in  its  production,  we 
see  that  a  small  number  of  persons  who  do  little 
or  no  productive  work  receive  a  large  share  of 
the  things  that  are  made  by  work.  The  evils  of 
privileged  classes  as  they  existed  in  Europe  a 
hundred  years  ago  have  been  transplanted  here, 
and  are  increasing  upon  the  soil  from  which  it 
was  thought  they  had  been  forever  shut  out. 

The  results  of  this  departure  from  the  equalitj^ 


MONEY   MAKING  28 

IN    FREE    AMERICA 

which  the  statesmen  of  a  century  ago  thought 
they  had  estabhshed,  are  to  be  found  throughout 
the  nation.  JNIillions  of  farmers,  after  years  of 
hard  labor,  are  barely  able  to  get  a  living.  The 
last  census  that  gives  the  facts  shows  that  in 
1890  there  were  more  than  two  million  (2,303,- 
061)  mortgages  on  farm  lands,  representing 
two  thousand  million  dollars  ($2,209,148,431) 
of  debts.  (You  can  send  for  the  Report  on 
Mortgaged  Farms,  to  the  Census  Bureau  at 
Washington.)  At  the  same  time  there  were 
more  than  one  million  and  a  quarter  (1,294,913) 
tenant  farmers  who  paid  either  money  or  a  share 
of  their  crops  for  the  use  of  the  land  which  was 
once  public  land.  This  was  28  per  cent,  of  the 
farmers.  Ten  years  later  farm  tenants  had  in- 
creased to  over  two  million  (2,024,964),  increas- 
ing the  percentage  to  35  per  cent.,  in  spite  of 
all  improvements  in  agricultural  methods,  and 
new  inventions  in  farm  implements  and  machin- 
ery which  save  labor.  The  independent  farmers 
of  early  times  are  becoming  the  tenants  of  pow- 
erful landowners  and  corporations.  In  some  of 
the  older  States  thousands  of  deserted   farms 


29  MONEY    MAKING 

IN    FREE    AMERICA 

bear  witness  to  the  failure  of  their  former 
owners. 

Even  from  the  West  and  Northwest  come 
stories  of  poverty  and  destitution  which  would 
be  incredible  if  they  were  not  Vouched  for  by 
reliable  authorities.  Each  year  sees  thousands 
of  farmers  driven  by  the  threat  of  starvation  to 
leave  the  land  they  have  tilled.  From  Minnesota 
to  Canada  and  back  again,  from  Iowa  to  the 
Dakotas  and  back  again — they  drift  in  the  hope 
of  an  independent  living,  and  at  last  they  join 
the  crowds  who  seek  work  in  the  towns  and 
cities. 

Nor  are  the  workers  in  the  cities  and  towns, 
in  the  mining  regions  or  in  the  lumbering  dis- 
tricts, any  better  off.  Those  farmers  who  aban- 
don this  struggle  against  poverty  and  migrate 
to  the  manufacturing  centers  find  there  that  the 
fight  for  existence  is  intensified.  On  every  hand 
there  is  a  great  surplus  of  labor,  eager  to  find  a 
"job."  Everyone  knows  that  were  it  not  for 
the  support  of  other  unions  and  the  interference 
of  the  strikers,  any  strike  could  be  broken  at 
once  by  filling  the  places  of  the  strikers. 


MONEY    MAKING  30 

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Statistics  compiled  from  the  reports  of  over 
one-fourth  of  the  trades  unions  in  the  State  of 
•New  York  show  that,  excluding  those  idle  be- 
cause of  sickness,  accident  or  strikes,  the  average 
number  of  their  members  unemployed  w^as 
11,100,  or  ten  per  cent.* 

This  means  that  because  chances  of  employ- 
ment are  limited,  one-tenth  of  the  working  days 
of  these  men  must  be  spent  in  enforced  idleness. 
And  yet  in  that  year  of  1903  the  proportion  of 
the  unemployed  unionists  (excluding  those  af- 
fected by  labor  troubles)  in  New  York  was 
"much  below  the  normal." 

But  this  is  not  a  matter  that  needs  elaboration. 
The  proof  is  found  in  the  throngs  of  men  and 
women  who  even  in  good  times  answer  every 
advertisement  of  "  Help  Wanted  ";  who  besiege 
factories,  stores  and  other  places  where  they 
hope  to  find  work,  and  in  the  daily  experience 
of  everj'^one  who  comes  in  contact  with  the  work- 

*  The  average  number  of  those  on  strike  was  5,500 ;  highest 
in  any  month,  15,983.  Average  number  sick,  1,200.  Average 
membership  considered,  110,100.  These  figures  are  for  the  year 
ending  February,  1904,  and  are  computed  from  the  New  York 
Department  of  Labor  Bulletin,  March,  1904. 


31  MONEY   MAKING 

IN    FREE    AMERICA 

ing  people.  In  city,  town  and  country  the  testi- 
mony is  the  same.  Far  more  men  and  women 
are  searching  for  work  than  can  possibly  find 
it.* 

Nor  is  it  only  among  farmers  and  mechanics 
that  this  complaint  of  recurring  harder  "  hard 
times "  is  heard.  Manufacturers,  merchants, 
bankers,  owners  of  railroads  and  steamships, 
providers  of  amusements,  publishers  of  news- 
papers, writers  of  books  and  men  engaged  in 
all  other  businesses,  join  in  declaring  that  trade 
is  periodically  depressed,  and  that  their  particu- 
lar industry  suffers  because  of  the  poverty  of 
those  who  consume  their  products  or  patronize 
their  business.  That  the  great  industrial  and 
financial  interests  are  periodically  depressed  is 
well  known,  although  partisan  politicians  usually 
claim  that  "  the  country  is  prosperous."^ 

*  FIGHTING    FOR    WORK 

Special  to  The  New  York  Times. 

Camden,  N.  J.,  Aug.  10,  1908. — A  riot,  in  which  one  man 
was  badly  stabbed  and  a  dozen  beaten  with  clubs  and  stones, 
occurred  here  this  morning  outside  the  works  of  the  Joseph 
Campbell  Preserving  Company,  when  1,500  unemployed  laborers 
gathered  in  answer  to  an  advertisement  which  the  company 
inserted  in  last  Saturday's  papers. 

t  In  the  New  York  Times  of  June  27,  1908,  we  find  an  inter- 


MONEY   MAKING  33 

IN    FREE    AMERICA 

In  the  presidential  campaign  of  1896  ap- 
peared, for  the  first  time,  the  spectacle  of  two 
great  political  parties,  and  a  third  smaller  party, 
joined  in  declaring  that  trade  and  industry  were 
languishing  because  of  bad  laws.  The  Repub- 
lican orators  and  the  press  united  in  asserting 
that  times  were  hard,  wages  low,  employment 
scarce,  markets  for  farm  products  and  manu- 
factured goods  limited,  and  business  and  pro- 
fessional men  unable  to  make  a  fair  livelihood. 
There  was  no  pretense  by  any  Republican,  from 
the  presidential  candidate  to  the  rural  editor, 
that  the  country  was  as  prosperous  as  it  ought 
to  be. 

The  Democrats  and  the  Populists  outdid  the 
most  pessimistic  of  the  Republican  "  blue  ruin  " 
wallers  as  preachers  of  calamity.     The  miseries 

view  with  R.  Fulton  Cutting  as  president  of  the  Association  for 
Improving  the  Condition  of  the  Poor. 

"  We  look  anxiously  each  week  for  some  let-up  in  the  tre- 
mendous demands  that  are  being  made  upon  us,  but  there  is 
none.  Unless  there  is  immediate  help  from  our  contributors 
we  shall  outrun  our  appropriations  by  $40,000  by  the  end  of 
the  year."  Asked  what  he  attributed  the  necessity  to,  Mr.  Cut- 
ting replied:  "To  the  prevalence  of  unemployment.  I  cannot 
remember  such  a  condition  existing  before.  Not  even  in  1893 
or  1894t  did  the  depression  persist  for  so  long." 


33  MONEY    MAKING 

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of  the  millions  of  over-taxed  and  oppressed 
farmers  were  the  texts  of  much  of  the  campaign 
oratory,  while  the  low  wages  and  involuntary 
idleness  among  the  workingmen  was  urged  as 
a  reason  for  free  silver.  Both  Democrats  and 
Populists  claimed  that  they  were  fighting  for 
the  people's  cause  against  the  trusts  and  mo- 
nopolies. 

Here,  then,  was  the  testimony  of  practically 
all  the  people,  that  business  conditions  were  very 
bad. 

That  in  the  year  1896  the  admitted  poverty 
of  the  farmers  and  workers  and  the  depression 
affecting  all  kinds  of  business  and  industry 
3hould  have  been  the  one  great  issue  in  a  bit- 
terly contested  presidential  campaign,  shows 
how  imperfectly  the-  hopes  of  the  Republic's 
founders  have  been  realized.  A  country  in 
which  all  political  parties  unite  in  asserting  that 
the  people  are  not  prosperous  is  not  the  country 
which  the  patriots  of  1776  believed  they  were 
preparing  for  their  posterity. 

In  the  presidential  campaign  which  followed 
in  1900  the  boldest  claims  of  the  Republican 


MONEY   MAKING  34 

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statisticians  were  that  the  average  workingman 
was  receiving  what  proved  on  examination  to  be 
but  a  trifling  increase  over  the  wages  previous 
to  1896.*  Yet  slight  as  it  was,  the  people  voted 
for  a  maintenance  of  the  existing  order  on  the 
principle  that  it  was  better  "  to  bear  the  ills  thej' 
have  than  fly  to  others  that  they  know  not  of." 
And  the  winning  campaign  cry  was  the  "  Full 
Dinner  Pail."  The  millions  who  vote  for  what 
they  think  will  give  them  an  extra  piece  of  pie 
for  the  pail  do  not  realize  the  sarcasm  of  that 
slogan.  Do  the  party  leaders  or  the  men  who 
put  up  the  campaign  funds,  or  the  men  who 
utilize  the  party,  carry  their  meals  in  tin  pails? 
Do  they  dine  on  sandwiches,  soggy  pie  and  cold 
coffee? 

*  Pennsylvania  Labor  Bureau  statistics  show  that  in  710  es- 
tablishments the  average  wage  rose  from  $1.43  a  day  in  1896 
to  $1.52  a  day  in  1900;  annual  earnings  in  1896  averaged  $382, 
and  in  1900  were  $438.  In  New  Jersey,  New  York  and  Michigan 
the  data,  while  incomplete,  indicate  about  the  same  increase. 

But  that  this  was  due  simply  to  the  recovery  from  a  panic  is 
sho^^'n  by  the  census  reports,  which  give  the  average  wages  in 
1900  as  li  per  cent,  less  than  in   1890. 

In  New  Jersey  average  earnings  declined  5  per  cent,  in  the 
ten  years,  and  were  only  $4  more  in  1905  than  in  1890,  despite 
the  great  increase  in  prices  and  rents. 


35  MONEY   MAKING 

IN    FREE    AMERICA 

Says  ex-Congressman  "Anti-pass"  Baker: 

"  But  what  has  happened  to  the  masses  ?  With  a  total 
estimated  wealth  of  some  one  hundred  and  ten  billions 
the  per  capita  tables  work  out  all  right,  there  should  be 
enough  to  go  round,  for  that's  equal  to  more  than  $6,000 
per  family.  But  who  has  it?  How  many  of  the  millions 
of  toilers  have  a  tenth  of  that  sum  free  and  clear?  How 
comes  it  that  the  bulk  of  the  people  are  shy  their  pro- 
portion of  this  enormous  wealth?  Have  they  been  lazy, 
thriftless,  or  improvident,  during  these  twelve  years?  If 
lazy,  theiT  who  created  the  wealth  ?  Has  the  average 
farmer,  mechanic,  salesman,  clerk,  teacher,  or  laborer 
squandered  their  portion  in  riotous  living?  Did  they 
spend  it  for  automobiles,  steam  yachts,  or  even  for  dia- 
monds? If  not,  what  has  become  of  it?  Why  haven't 
they  got  it,  how  did  they  lose  it?  What  has  been  the 
unseen,  subtle,  but  apparently  all-powerful,  force  that  has 
taken  it  from  them?  Why  have  matters  become  so  ap- 
palling in  America  that  the  so-called  effete  countries  of 
Europe  have  felt  impelled  to  take  official  cognizance  of 
the  deplorable  conditions  in  which  so  many  of  our  toilers 
are  compelled  to  live?  The  Italian  Government  (as  a  re- 
sult of  the  shocking  reports  that  reached  it)  has  sent 
a  commission  to  investigate.  Most  revolting  conditions 
were  shown  to  exist.  Whole  families  were  found  crowded 
into  one  and  two-room  apartments,  while  not  only  the 
women,  but  little  children  not  much  more  than  babies, 
were  found  working  in  filthy,  unhygienic  quarters,  help- 
ing to  eke  out  a  scanty  living  for  the  family.  Over- 
crowding was  shown  to  be  the  rule,  not  the  exception." 


CHAPTER  III 

OVER-PRODUCTION 

NINE  out  of  ten  of  the  professors  of  po- 
litical economy  and  other  "  orthodox " 
writers  on  the  causes  of  hard  times,  when  asked 
why  mills  and  factories  close  and  willing  workers 
become  idle,  reply  "  over-production."  Pressed 
for  a  further  explanation  they  say:  "  The  great 
increase  in  productive  power  of  our  manufac- 
turing industries  has  enabled  the  people  to  make 
far  more  things  of  all  kinds  than  they  can  use. 
Thus  the  shoe  factories  of  the  country  can  in 
six  months  make  all  the  shoes  used  in  a  year. 
So  also  with  our  iron  furnaces  and  steel  works, 
our  woolen  mills,  cotton  factories  and  clothing 
shops.  The  invention  of  improved  machinery 
has  so  greatly  increased  the  out]3ut  of  the 
workers  that  they  produce  far  more  goods  than 
can  find  a  market.  Yes,  it  is  '  over-production ' 
that  is  to  blame  for  the  business  depressions 
which  cause  so  much  loss  to  employers  and  wage 


earners." 


36 


37  MONEY   MAKING 

IN    FREE    AMERICA 

Do  not  blame  the  professors;  they  have  to 
hold  down  their  jobs;  and  probably  believe  what 
they  say. 

President  Roosevelt  has  expressed  this  popu- 
lar theory  in  these  words :  "  Single  tax  won't 
do  any  good ;  socialism  won't  do  any  good ;  none 
of  these  things  will  do  any  good  so  long  as  our 
factories  produce  more  goods  than  the  people 
can  buy.  There  are  bound  to  be  idle  mills  and 
factories,  and  idle  workers,  whenever  there's  a 
general  over-production  such  as  we've  been  hav- 
ing lately." 

Mr.  Roosevelt  is  regarded  as  a  statesman,  and 
it  is  true  that  nothing  will  help  unless  it  enables 
the  people  to  buy  what  the  people  make. 

If  you  have  been  taken  in  by  this  parrot 
phrase  of  "  over-production,"  just  stop  and 
think  what  it  means.  Is  it  a  fact  that  the  people 
now  produce  more  things  of  all  kinds  than  they 
can  use?  Have  the  eighty-six  million  Americans 
all  the  good  shoes  and  clothes  they  could  wear? 
Have  they  all  the  wholesome  food  they  could 
eat?  Have  they  all  the  furniture  they  need? 
Have  they  all  got  as  good  houses  as  they  would 


MONEY   MAKING  39 

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like  to  live  in?  Has  even  each  family  a  house? 
Have  they  all  the  books,  paintings  and  other 
things  which  make  up  the  enjoyment  of  civilized 
life?  The  only  answer  to  all  these  questions  is 
No!  What  nonsense,  then,  to  talk  of  "over- 
production "  so  long  as  millions  of  people  not 
only  want  more  of  all  kinds  of  things  made  by 
labor,  but  are  actually  suffering  for  lack  of 
them. 

With  millions  of  men  and  women  lacking 
comfortable  clothing,  how  can  there  be  an  "  over- 
production" of  clothes?  With  millions  living 
on  a  scanty  diet  of  coarse  food,  how  can  there 
be  an  "over-production"  of  farm  products? 
With  millions  living  in  small  and  dingy  shacks, 
or  cramped  into  ill-lighted  tenements,  who  can 
say  that  there  is  an  "over-production"  of 
houses?  So  with  all  the  other  things  of  which 
it  is  said  we  have  too  much.  In  every  case  there 
is  positive  need  of  far  more  of  all  kinds  of 
wealth  than  can  at  present  be  produced. 

Professor  Richard  T.  Ely,  of  Wisconsin  Uni- 
versity, says :  "  Yet  the  statement  that  the 
cause  of  hard  times  is  prosperity,  paradoxical  as 


39  MONEY    MAKING 

IN    FREE    AMERICA 

it  seems,  has  a  large  element  of  truth  in  it,  and 
suggests  one  line  of  fruitful  thought." 

To  which  E.  M.  Burchard  replies :  "  What  a 
contemptible  juggling  with  words  is  this,  '  pros- 
perity the  cause  of  hard  times.'  And  yet  there 
is  a  sense  in  which  it  is  true,  although  the  pro- 
fessor forbears  the  illustration:  the  prosperity 
of  robbers  is  undoubtedly  the  cause  of  the  hard 
times  of  the  victims.  One  of  the  finest  examples 
of  hard  times  caused  by  prosperity  is  the  case 
of  the  man  who  went  down  from  Jerusalem  to 
Jericho  and  fell  among  thieves.  The  thieves 
upon  this  occasion  had  a  very  prosperous  time 
of  it;  the  hard  times  fell  to  the  lot  of  the 
traveler. 

"  Never  before  in  the  history  of  the  race  was 
so  much  of  all  earthly  good  within  easy  reach 
of  humanity.  Times  are  hard  when  there  is  a 
scarcity  of  the  good  things  of  life;  but  we  are 
troubled  with  a  superabundance. 

"  If  times  were  hard,  they  would  be  hard  for 
all  alike.  It  is  not  the  possession  of  immense 
crops  that  causes  the  poverty  of  the  husband- 
man, his  '  hard  times,'  but  the  fact  that  he  is 


MONEY   MAKING  40 

IN    FREE    AMERICA 

forced  to  part  from  them  without  just  recom- 
pense for  his  toil — this  is  the  'hardness,'  and  it 
has  nothing  to  do  with  the  times,  wliile  it 
has  everything  to  do  with  our  pohtical  econ- 
omy." 

No,  it  is  not  because  the  people  can  make 
more  things  than  they  can  use  that  ^ve  have  hard 
times.  It  is  because,  as  President  Roosevelt  said, 
they  make  more  things  than  they  can  buy.  It 
is  because  our  present  system  takes  from  the 
people  so  much  of  their  products  that  they  can- 
not buy  back  the  goods  they  produce.  It  is 
because  of  under-consumption  that  mills  and 
factories  get  overstocked  every  few  years  and 
have  to  shut  down,  throwing  their  emploj^ees 
out  of  work.  Crowds  are  kept  idle,  so  that  they 
cannot  buy  the  things  they  need,  and  there  is 
an  apparent  over-supply. 

When  we  give  every  man  and  woman  a  fair 
chance  to  work  and  to  retain  the  full  fruits  of 
their  labor,  they  will  always  be  able  to  buy  as 
much  goods  as  they  produce,  and  there  can 
never  be  seen  the  strange  contradiction  of  mil- 
lions suffering  for  lack  of  things  which  other 


41  MONEY    MAKING 

IN    FREE    AMERICA 

millions  are  willing  and  anxious  to  make  for 
them. 

For,  after  all,  buying  is  only  exchanging:  I 
write  and  sell  my  writings;  you  grow  potatoes 
and  sell  them.  I  buy  the  potatoes  and  you  buy 
the  books  and  each  has  what  the  other  made — 
my  writings  even  help  you  to  grow  potatoes  and 
your  potatoes  help  me  to  write  books. 

We  may  not  agree  as  to  the  best  way  out  of 
the  quagmire  in  which  society  finds  itself  to-day. 
But  in  any  case,  don't  ever  allow  yourself  to  be 
humbugged  by  the  foolish  talk  of  "  over-produc- 
tion." There's  no  such  thing  in  the  world — un- 
fortunately. 

In  one  respect  only  this  is  hardly  true.  There 
is  an  "  over-production  '*  of  laws.  State  and 
national  legislatures  have  been  busy  for  fifty 
years  grinding  out  class  legislation,  until  we 
have  now  far  more  foolish  laws  of  all  kinds  than 
the  people  can  find  use  for.  We  have  also  an 
over-production  of  thieves,  paupers,  parasites, 
and  tramps. 

Taking  it  for  granted  that  you  do  not  believe 
that  our  business  and  industrial  troubles  are  due 


MONEY   MAKING  42 

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to  too  much  wealth,  there  remains  the  question 
whether  we  can  produce  enough  for  our  needs. 
This  is  a  very  important  point,  because  the  same 
class  of  writers  and  teachers  who  preach  "  over- 
production "  contradict  themselves  by  saying 
that  the  people  are  poor  because  they  produce 
too  little.  And  the  advice  given  by  such  friends 
of  labor  as  Henry  Clews  and  Mr.  William 
Rockefeller  is  that  the  producers  should  work 
harder  or  more  intelligently  so  as  to  create  a 
larger  amount  of  wealth. 

Men  get  everything  they  need  from  the  land. 
Think  of  any  article  that  you  use — shoes,  fuel, 
food,  a  bed  or  shelter.  All  these  things  come 
from  Mother  Earth,  and  her  products — from 
the  Earth,  which  was  the  only  thing  the  first 
settlers  found  in  America  when  they  landed 
here,  few,  weak,  unskilled,  and  began  to  grow 
great  and  wealthy  and  strong. 

Those  who  are  now  "  out  of  work  "  are  neither 
few  nor  weak  nor  unskilled.  Unemploj^ed  men 
can  be  found  in  plenty  who  can  do  every  kind 
of  work  known  to  men.  They  lack  clothing  and 
fuel  and  shelter,  only  because  they  can  nowhere 


43  MONEY    MAKING 

IN    FREE    AMERICA 

obtain  the  natural  materials  to  produce  what  they 
lack.  Someone  owns  all  the  land,  to  which  they 
could  get,  and  demands  a  fee  or  a  rent  or  a 
royalty  before  he  will  let  others  make  goods 
out  of  it. 

"Oh,  well,"  answers  the  Monopolist,  "there 
is  plenty  of  land  to  be  had  cheap  enough  in  Ari- 
zona or  Tennessee  or  somewhere  else  that  I  can't 
exactly  name,  but  I  know  they  would  be  glad 
to  give  it  to  you  for  nothing.  Look  at  the  aban- 
doned farms  all  over  the  country."  But  there 
is  no  free  land  that  is  good  for  anything.  If 
there  were,  don't  you  know  some  speculator 
would  take  it  up?  If  there  were,  do  you  think 
smart  American  men  would  "  farm  on  shares  " 
as  they  do  now?  That  is,  give  a  man  who  does 
nothing,  a  third  or  the  half  of  the  crop  that  they 
raise  for  the  mere  privilege  of  using  a  bit  of 
land  which  he  owns  ?  * 

No;  as  the  Special  Committee  of  the  N.  Y. 

*  A  stranger  addressed  the  farmer's  boy  across  the  fence: 
"  Young  man,  your   corn   looks   kind  o'  yellow."     "  Yes,   that's 
the  kind  we  planted."     "  Don't  look  as  you  would  get  more  than 
half  a  crop."     "  We  don't  expect  to.    The  landlord  gets  the  other 
half." 

The  jest  would  be  pointless,  were  not  that  the  usual  thing. 


MONEY   MAKING  44 

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Association  for  Improving  the  Condition  of  the 
Poor  says:  "The  phrase,  'abandoned  farms/ 
means  only  abandoned  to  the  mortgagee."  (See 
their  rej^ort  upon  Congestion  of  Population  in 
Cities  and  Desertion  of  Agricultural  Districts 
in  New  York  State.) 

It  seems  incredible  when  one  looks  at  the 
miles  of  vacant  lots  and  unused  tracts  round 
New  York  City,  in  the  Bronx,  in  Queens  Countj^ 
on  Staten  Island,  along  the  Palisades,  even  on 
Manhattan  Island;  but  I  have  gone  over 
Greater  New  York  again  and  again  with  a  fine 
tooth  comb  to  find  even  one  acre  that  the  owners 
would  let  poor  people  use,  only  until  the  lots 
were  sold  or  needed,  to  raise  vegetables  or  even 
to  pitch  tents  and  save  rent.  None  is  to  be 
had. 

But  if  there  were  such  cheap  land  "over 
there,"  what  good  would  it  be  to  a  man  who 
cannot  get  at  it?  To  a  laborer  or  a  clerk  with  a 
family,  such  land  might  as  well  be  in  the  King- 
dom of  Heaven.  He  cannot  get  there.  If  he 
could,  however  cheap  it  might  be,  he  could  not 
buy  it.     A  pioneer  once  said:     "I  could  have 


45  MONEY    MAKING 

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bought  the  whole  site  of  Chicago  for  a  pair  of 
boots."  "Why  didn't  you  buy  it?  "  said  his  as- 
tonished Hstener.  "Because,"  he  answered,  "I 
didn't  have  the  boots." 

Why,  if  it  is  over-production  that  is  the 
trouble,  and  these  people  did  get  to  the  land,  as 
the  Apostles-of-Things-as-They-Are  tell  us  they 
ought  to  do,  then  there  would  be  still  more  pro- 
duction. "  Over-production  "  is  like  the  theory 
of  Malthus  that  men  tend  to  increase  faster 
than  their  food  increases,  a  convenient  lie  to 
shift  upon  the  Creator  the  responsibility  for  the 
sins  of  men. 

As  Henry  D.  Lloyd  says:  "Holding  back 
the  riches  of  earth,  sea  and  sky  from  their  fel- 
lows who  famish  and  freeze  in  the  dark,  they 
declare  to  them  that  there  is  too  much  light  and 
warmth  and  food.  .  .  .  The  majoritj^  of 
men  have  never  been  able  to  buy  enough  of  any- 
thing ;  but  this  minority  have  too  much  of  every- 
thing to  sell." — (Wealth  Against  Common- 
wealth, Chap.  I.) 

Of  course,  if  hard  times  are  caused  by  over- 
production, the  remedy  would  plainly  be  for  the 


MONEY   MAKING  46 

IN    FREE    AMERICA 

producers  to  stop  working  and  consume  more. 
Instead  of  advocating  this,  the  men  who  assume 
to  do  the  thinking  for  the  people  advise  them 
to  work  still  harder  and  to  practice  economy. 
"  Hustle  and  save "  is  the  golden  rule  of  the 
orthodox  economists. 
James  P.  Kohler  says: 

"  Others  say  that  the  panics  come  from  extravagance, 
that  the  people  buy  too  much,  spend  their  money  too 
freely,  live  too  high,  etc.  I  was  coming  up  from  Florida 
in  a  Mann  boudoir  car.  Only  two  passengers  were  aboard. 
We  soon  found  ourselves  together  in  the  smoking  apart- 
ment, and  we  began  discussing  the  business  depression,  a 
subject  on  every  tongue  from  Maine  to  Florida.  My  fel- 
low traveler  claimed  that  *  extravagance  '  was  the  cause. 
'  Our  people  spend  too  much  money/  he  said.  '  Why,  the 
farmers  insist  on  having  things  far  beyond  their  means. 
Some  of  their  wives  will  have  carpets  on  tlieir  front  room 
floors  and  pictures  on  their  walls,  and  tliey  want  pianos 
or  organs  too,  and  some  even  go  so  far  as  to  send  their 
children  off  to  school.  Now  tliis  thing  will  not  do,'  said  my 
friend,  '  the  nation  cannot  stand  it.'  I  asked  him  Avhat 
his  business  was.  He  said:  '  I  am  a  manufacturer  of 
cigars.  I  liave  just  been  down  to  Cuba  looking  at  my 
plantation.'  AVcll,  I  said,  if  the  American  people  should 
accept  your  views  about  extravagance  and  stop  smoking 
cigars  Avliat  would  become  of  your  business?  He  saw  it 
at  once,  and  before  we  had  reached  Atlanta  he  was  willing 
to  admit  that  it  was  this  very  extravagance,  of  which  he 


47  MONEY    MAKING 

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and  other  business  men  complained,  that  kept  the  wheels 
of  industry  revolving  and  made  it  possible  for  him  and 
them  to  carry  on  the  particular  businesses  in  which  they 
were  engaged." 

Leaving  these  gentlemen  to  settle  among 
themselves  their  inconsistent  doctrines,  let  us 
next  look  at  the  facts  in  reference  to  the  pro- 
duction and  ownership  of  wealth  in  the  United 
States. 

Some  of  the  Difficulties  They  Have  to 

Settle  as  to 
The  Complicated  Causes  of  Hard  Times. 

It  is  clear,  to  the  conservative  mind,  that  busi- 
ness depression  is  the  result  of  many  causes 
working  together,  and  not,  as  some  agitators 
claim,  mainly  to  that  rise  in  rents  which  drains 
the  resources  of  the  great  body  of  producers 
and  causes  the  speculative  advance  in  the  price 
of  land  which  stops  production. 

The  following,  gleaned  from  leading  financial 
articles  and  authorities,  agree  so  closely  and 
commend  themselves  as  so  evidently  true  that 
we  may  certainly  consider  the  problem  solved ; 


MONEY    MAKING  48 

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Capital  is  idle  because  business  is  bad. — Wall  Street 
Daily  News, 

Business  is  dull  because  capital  is  scarce. — St.  Louis 
Republican. 

The  country  needs  capital. — Atlanta  Constitution. 

Extravagance  in  expenditure  is  at  the  root  of  the 
trouble. — Matthew   Marshall. 

The  people  are  hoarding  money. — Baltimore  American. 

The   people   at  large   are  poor. — Baltimore  Sun. 

Panics  are  the  inevitable  result  of  the  protective  tariff 
system. — W.  C.  Whitney. 

A  contracted  currency  is  the  cause. — Springfield  Re- 
publican. 

The  uncertainty  about  currency  legislation  has  unsettled 
business. — National  Bank  Reporter. 

The  balance  of  trade  is  against  us  because  we  have  been 
importing  too  much. — Philadelphia  North  American. 

The  English  have  been  selling  our  securities. — Boston 
Journal. 

The  interest  sent  out  of  the  country  has  sapped  our 
prosperity. — St.  Louis  Globe-Democrat. 

Railroad  building  and  development  of  the  resources  of 
the  country  liave  come  to  a  standstill. — Chicago  Record. 

Over-building  of  railroads  and  over-speculation  are  the 
real  trouble. — New   York  Post. 

Confidence  is  all  that  is  lacking. — Real  Estate  Record 
and  Guide. 

Credits  are  too  much  extended. — Financial  Chronicle. 

Capital  is  locked  up  in  undeveloped  enterprises. — Bos- 
ton Herald. 

We  are  feeling  the  effects  of  over-trading  in  all 
branches. — New   York  Sun. 


49  MONEY   MAKING 

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An  army  of  middlemen  who  consume  wealth,  but  produce 
nothing,  prey  upon  the  workers. — Farmers'  Alliance. 

The  Maxwell's  Talisman  says  the  cause  of  hard  times 
is  "  too  many  people  in  the  city,"  while  the  Chicago  Inter 
Ocean  tells  us  that  "  too  many  men  till  the  soil." 

Nothing  cranky  in  these  views. 


CHAPTER   IV 

WAGES    INSTEAD    OF     PRODUCT 

/^~\  F  all  the  nations  of  the  earth  America  has 
^-^  the  greatest  wealth-producing  power  in 
proportion  to  population.* 

We  lead  the  world  in  the  arts  of  raising  crops 
and  making  things.  The  American  farmers  and 
wage-workers,  with  superior  intelligence  and 
using  their  labor  and  skill  upon  unequaled  nat- 
ural resources,  can  and  do  produce  more  wealth 
than  the  workers  of  any  other  nation.    But  do 

*  In  the  Engineering  Magazine  for  May,  1904,  Mr.  Wm.  G. 
Clark  compares  the  value  of  manufactures  per  wage  earner  in 
different  countries: 

United   States    $2,450 

Canada     1,455 

Australia     900 

France    690 

United    Kingdom    556 

Germany      460 

This  table  is  computed  from  gross  value  of  products  and  the 
figures  are  not  comparable  with  others  in  this  chapter.  But 
they  illustrate  the   superior  productivity  of  American   labor. 

Mr.  Clark  calculates  that  the  share  of  labor  and  power  (for 
machinery)  in  the  cost  of  production  is  21.4  per  cent,  in  Euro- 
pean countries,  and  in  the  United  States  is  17.4  per  cent.  Power 
is  estimated  to  cost  the  same  on  both  continents.  So  that  our 
better  paid  labor  is  cheaper,  because  so  much  more  productive, 
than  is  the  "  cheap  "  labor  to  European  manufacturers. 

50 


51  MONEY    MAKING 

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they  themselves,  do  you,  for  instance,  reap  the 
material  advantages  of  superior  skill  and  natui'al 
bounties  ? 

That  Americans  are  better  off  than  European 
farmers  and  laborers  is  not  an  answer.  Natural 
resources  should  benefit  all  who,  directly  or  indi- 
rectly, labor  upon  them;  and  the  profit  of  the 
superior  skill  and  more  effective  labor  should  all 
go  to  those  who  have  the  skill  and  do  the  labor. 
We  should  not  be  satisfied  with  less.  Do  not 
be  content  with  being  better  off  than  the  Hot- 
tentot, or  even  than  the  Hun. 

Horace  Traubel  has  condensed  the  Wages 
Question  into  a  phrase : 

"  The  world  is  tired  of  hearing  that  the 
laborer  is  worthy  of  his  hire.  The  laborer  is 
worthy  of  his  product." 

What  is  this  product,  and  how  much  of  it 
does  the  laborer  now  get? 

Look  around  you. 

You  find  the  farmer  tilling  a  rugged  farm — 
which  he  may  or  may  not  own — working  14  to 
16  hours  a  day,  and  having  only  a  pittance  at 
the  end  of  the  year. 


MONEY    MAKING  53 

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You  see  the  bricklayer  living  in  a  little  house — 
which  probably  is  not  his — or  perhaps  living  in 
rooms  or  a  dingy  flat.  And  you  see  him  con- 
structing fine  dwellings  for  those  who  have  done 
no  labor. 

You  look  at  the  cobbler  at  his  bench  (or  the 
shoe  factory  hand  turning  out  hundreds  of  pairs 
of  shoes) — ^his  children  proverbially  go  barefoot. 

You  notice  the  clerk,  the  bookkeeper,  the 
small  storekeeper,  the  ordinary  doctor  or  lawyer, 
the  clergyman ;  and  you  know  that  most  of  these 
have  a  hard  time  to  "  get  along  " ;  that  they  are 
continually  worrying  over  how  to  "make  both 
ends  meet."  And  you  know  also  that  there  are 
other  people  who  have  neither  the  skill  nor  the 
intelligence  nor  the  honesty  of  these,  who  have 
no  need  to  take  thought  for  the  morrow. 

And  yet  despite  these  contrasts  which  you  see 
every  day,  you  may  be  one  of  those  who  believe 
that  people  are  really  prosperous;  that  wealth 
is  rightly  distributed;  that  wages  are  high,  even 
though  yours  and  those  of  people  whom  you 
know  are  not.  And  because  you  have  been  told 
that  we  are  all  prosperous  you  want  statistical 


53  MONEY    MAKING 

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proof  that  the  conditions  with  which  you  are 
famihar  are  the  usual  conditions  everywhere. 

Well,  here  are  the  statistics.  Remember, 
though,  that  the  only  use  of  statistics  is  to  re- 
inforce matters  of  every-day  observation. 

The  census  does  not  give  the  aggregate  wealth 
annually  produced.  The  figures  for  the  items 
it  does  give,  and  calculations  based  on  them,  are 
given  in  the  Appendix  to  this  book.  These  show 
that  at  the  lowest  estimate,  the  value  of  the 
tangible  wealth  produced  every  year  is  more 
than  $19,000,000,000;  nineteen  billions  of  dol- 
lars. 

This  is  equal  to  $650  for  each  of  the  twenty- 
nine  million  persons  (men,  women  and  chil- 
dren) then  "engaged  in  gainful  occupation." 
It  is  equal  to  an  annual  production  of  material 
things  to  the  value  of  $1,260,  for  every  family 
of  five  persons  in  the  United  States,  whether 
they  work  or  not.  But  the  great  majority  of 
working  families  do  not  get  half  that.  And  the 
real  annual  production  of  wealth  is  much  larger 
than  indicated  by  the  calculations  from  official 
figures. 


MONEY    MAKING  54 

IN    FREE    AMERICA 

But  figures  are  not  needed  to  show  the  enor- 
mous production  of  wealth.  Everj^where  one 
looks,  there  is  abundance.  The  stores  are  full 
of  all  sorts  of  food  and  merchandise,  the  mills 
are  turning  out  everywhere  ever  so  much  more 
than  the  "hands"  in  them  get;  the  cities  are 
filled  with  fine  buildings,  where  but  a  few  years 
ago  there  was  nothing  save  the  bare  land. 

There  are,  regrettably,  no  complete  returns  as 
to  the  income  of  families,  showing  how  the 
wealth  annually  produced  is  divided.  But  we 
have  some  data  in  the  reports  on  manufactures. 
The  1900  census  shows  that  the  average  yearly 
earnings  of  each  of  the  5,308,406  persons  em- 
ployed in  manufacturing  was  $437.96.  This 
was  $6.97  less  than  the  average  annual  wage 
shown  by  the  1890  census,  which  was  $444.83 
per  worker.* 

The  census  bureau  says  this  reduction  was 
only  an  apparent  one,  due  to  the  exclusion  of 

*  The  "  average  number  of  wage-earners "  in  tlie  present 
census  means  the  number  that  would  be  required  to  do  the  work 
actually  performed  had  all  the  factories  run  for  52  weeks.  The 
"  average  annual  earnings "  is  what  a  man  would  average  if 
continuously  employed.  This  method  of  calculation  makes  no 
allowance   for  unemployment  and  the  average  wages  shown  are 


55  MONEY   MAKING 

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high-salaried  foremen  and  managers  from  the 
1900  returns;  partly  also  because  of  more  com- 
plete returns  of  the  wretched  labor  in  the  South. 
It  is  apparent  enough  to  the  men  who  suffered 
the  cut;  but  even  if  there  was  no  reduction  the 
average  for  the  five  millions  above  reported  is 
low  enough. 

This  average  is  a  little  over  eight  dollars  a 
week  for  each  worker,  which  isn't  much,  though 
it  means  more  in  rural  districts  than  in  New 
York  City.  But  where  li\'ing  is  cheap,  wages 
are  lower  than  this.  The  following  table  further 
subdivides  the  census  compilation  for  164  prin- 
cipal cities: 

1900.                                                                Average  Average 

No.  Wage-  Yearly 

"    Earners.  Wages. 

The    10   largest  cities 1,412,831  $489 

154    next   largest 1,599,033  445 

Outside  these  cities 2,294,279  400 

*  5,306,143 
therefore  too  high.  Had  the  same  method  of  averaging  employ- 
ment heen  used  in  1900  as  in  1890  the  decrease  in  average  wages 
shown  would  have  been  greater.  The  change  of  method,  say 
the  Census  authorities,  "  undoubtedly  invalidates  in  a  marked 
degree,  any  comparison  that  may  be  attempted  between  the  re- 
turns of  the  two  censuses."  (Census,  1900,  vol.  VII.,  p.  cvi.) 
*  This  is  the  total  of  this  census  classification. 


MONEY   MAKING  56 

IN    FREE    AMERICA 

In  the  largest  cities  the  workers  have  to  live 
at  a  distance  from  their  employment  and  pay 
carfare  daily;  provisions  are  higher;  rents  are  a 
great  deal  higher — enough  to  take  away  what- 
ever the  other  increased  expenses  have  left  of 
the  liigher  wages.  These  figures  are  for  all 
workers. 

The  New  Jersey  Labor  Bureau  reports  show 
that  in  1906,  which  was  a  "  prosperous  "  year, 
58  per  cent,  of  the  men  employed  in  manufac- 
turing, at  specified  wages,  were  working  for 
less  than  $12  a  week,  and  75  per  cent,  of  the 
women  and  girls  for  less  than  $8.* 

In  bulletin  No.  93  on  Earnings  of  Wage- 
earners,  1905,  the  Census  Bureau  gives  the  ac- 
tual weekly  earnings  in  manufacturing,  when 
employed.  For  the  3,297,819  workers  the  aver- 
ages are: 

Men,    16   and   over $11.16 

Women,    16    and    over 6.17 

Children    3.46 

*  These  figures  are  for  2,120  establishments,  employing  from 
236,466  to  277,564  hands,  according  to  the  condition  of  business. 
One-quarter  of  the  employees  are  women  and  children. 


67  MONEY   MAKING 

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One-half  the  men  were  getting  from  $9  to  $15 
a  week,  and  one-half  the  women  from  $5  to  $7. 

The  census  of  manufactures  for  1904  (bulle- 
tin 57)  is  not  quite  comparable  with  1900.  It 
showed,  however,  that  "  average  "  yearly  earn- 
ings had  increased  to  about  $480. 

But  meanwhile  rents  and  prices  were  going 
up.  The  Federal  Bureau  of  Labor  (bulletin 
77,  July,  1908)  gives  a  series  of  tables  showing 
the  changes  from  1890  to  1907  in  hourly  wages 
in  selected  industries,  and  the  changes  in  retail 
prices  of  food.  The  report  shows  that  while 
the  full-time  weekly  earnings  (if  employed) 
have  increased  20  per  cent,  in  the  last  ten  years, 
food  prices  also  have  gone  up,  and  while  there 
have  been  variations  from  year  to  year,  the 
weekly  earnings  will  buy  only  a  trifle  more  food 
than  in  1890  and  less  than  in  1896  or  1899. 

The  bulletin  shows  from  the  retail  prices  of 
food  in  this  country  from  1890  to  1907  the  in- 
crease in  the  cost  of  living.  The  report  is  based 
on  statistics  gathered  through  information  fur- 
nished by  2,567  workingmen's  families.  The 
tables  show  that  the  average  cost  of  food  per 


MONEY   MAKING  59 

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family  was  lowest  in  1896  and  that  it  has  steadily 
increased  since  then,  the  per  cent,  of  increase 
being  over  one-fourth  (26.3),  or  an  annual  aver- 
age for  the  family  of  $77.99.  This  is  in  food 
alone. 

From  1897  to  1906  prices  have  risen  an  aver- 
age of  46  per  cent.,  according  to  Dun's  tables. 
These  are  the  most  scientifically  constructed  of 
any  tables  to  show  the  relative  cost  of  living. 
Bradstreet's  figures  say  that  prices  in  1906  were 
42  per  cent,  higher  than  in  1897.* 

If  you  sometimes  find  it  difficult  to  get  help 
at  what  seems  high  wages,  that  only  shows,  in 
view  of  these  figures,  how  precious  employment 
is,  when  the  employed  will  not  give  up  their 

*  On  this  same  point  the  New  Jersey  Bureau  of  Labor  report 
(1907)   says: 

"During  the  ten  years  (1896-1906)  the  cost  of  almost  every 
commodity  required  for  family,  personal  and  business  purposes 
has  been  slowly  but  steadily  advancing.  A  distressing  circum- 
stance connected  with  the  matter  is  that  the  advances  in  cost 
bear  with  rather  unequal  weight  on  various  classes  and  conditions 
of  persons.  The  increase  in  land  values  naturally  following  the 
growth  of  population  has  contributed  largely  toward  sending 
rents  up.  The  building  trades  workmen  arc  probably  the  only 
class  of  wage-earners  who  have  secured  during  recent  years  any 
very  large  advances  in  the  matter  of  wages  and  working  hours. 
With  but  little  if  any  increase  in  wages  and  salaries,  the  largest 


59  MONEY   MAKING 

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poorly  paid  places  to  take  advantage  of  local  or 
temporary  demands  at  better  prices. 

The  1900  census  shows  that  the  net  value  of 
manufactured  articles  after  deducting  cost  of 
raw  materials  and  of  goods  purchased  in  partly 
manufactured  form,  was  $1,066  per  worker  en- 
gaged in  manufacturing.  The  average  wage  was 
under  $438.  Of  course  there  are  expenses  of 
various  kinds  to  come  out  of  the  difference ;  and 
the  employer  has  to  pay  rent  and  taxes  and  is 
taxed,  too,  by  various  monopolies.  But  the  pro- 
portion of  wages  to  value  of  net  product  is 
shown  to  be  decreasing. 

1880  1890  1900 

Value  of  net  product  per  worker $720  |990  $1066 

Average   wages 346  444  438 

Percentage  of  wages  to  product 48  .44  .41 

part  of  the  home  renting  class,  find  themselves  called  on  to  pay 
rents  that  range  as  high  as  50  per  cent,  in  excess  of  the  figures 
of  former  years." 

Where  some  of  the  increased  cost  of  living  has  gone  is  indi- 
cated in  another  part  of  this  report  in  an  investigation  of  an 
increase  in  building  cost.  The  bureau  says  that  reliable  estimates 
have  been  secured  placing  the  advance  in  cost  of  material  during 
the  past  ten  years  at  20  to  30  per  cent.  This  material  being  either 
brick,  stone,  lumber  or  steel,  indicates  that  the  owners  of  the 
ground  from  which  that  material  is  taken  are  getting  a  share 
of  the  increased  land  rent  just  as  are  the  owners  of  building 
sites. 


MONEY   MAKING  60 

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The  Pennsylvania  Bureau  of  Industrial  Sta- 
tistics (Report  1905)  gives  the  comparative  fig- 
ures of  710  establishments  annually  from  1896 
to  1905  inclusive.  This  report  shows  that  the 
average  yearly  earnings  increased  from  $382  in 
1896  to  ^$481  in  1905,  which  was  due  more  to  the 
increase  in  the  number  of  daj^s  worked  than  to 
raises  in  wages,  as  the  average  daity  wage  had 
risen  only  from  $1.43  to  $1.63.  But  the  most 
interesting  fact  revealed  is  that  the  per  cent, 
of  wages  received  compared  to  the  value  added 
to  the  material  by  labor  declined  from  53  per 
cent,  to  51  per  cent,  in  the  nine  years.*  New 
Jersey  statistics  (census  bulletin)  also  show  a 
decline.  As  the  percentage  of  wages  to  product 
continues  to  decrease,  the  ability  of  the  workers 
to  purchase  what  they  produce  will  also  decrease, 
producing  another  panic,  which  the  unthinking 
will  be  taught  to  attribute  to  "  over-production." 

The  amount  of  wealth  in  the  country  affects 

*  Where  some  of  this  difference  in  value  goes  is  indicated  by 
the  fact  that  while  the  market  value  of  the  finished  products 
increased  135  per  cent,  the  total  wages  paid  increased  only  108 
per  cent.,  and  the  cost  of  "basic  material"  used  increased  154 
per  cent.  Apparently  the  owners  of  the  iron  mines  and  other 
sources  of  raw  material  are  getting  the  prosperity. 


61  MONEY   MAKING 

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very  little  the  proportion  of  it  that  labor  gets 
as  wages.  Labor  will  get  the  lion's  share  of 
whatever  there  is  when  there  are  more  jobs  than 
hands;  it  will  get  the  jackal's  share  when  there 
are  more  hands  than  jobs. 

There  are  no  statistics  which  give  the  average 
earnings  of  salaried  emplo^^ees  in  sufficient  de- 
tail and  quantity  to  be  of  value.  But  we  know 
that  clerical  work  is  more  dignified,  cleaner,  and 
less  dangerous  than  manufacturing.  A  me- 
chanic's pay  of  $5  per  day  is  still  "  wages,"  but 
$10  a  week  is  a  "  salary."  The  earnings  of  most 
salaried  workers  must  be  as  low  as  the  average 
earnings  of  those  employed  in  manufacturing, 
else  the  hands  would  leave  the  factories  until 
clerks'  wages  had  come  down  to  the  level. 

If  you  are  not  a  "  wage-earner  "  but  get  say 
$1,000  a  year  as  clerk  or  manager,  it  is  fair  to 
presume  that  you  also  get  just  as  little  of  what 
you  earn.  You,  like  the  employer,  are  helping 
to  produce,  just  as  much  as  the  farmer  or  the 
mechanic.  Your  labor  is  needed  to  get  the  goods 
from  them  to  their  customers.  Your  employer 
does  not  usually  get  what  you  lose.    Even  if  he 


MONEY    MAKING  62 

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did,  to  demand  more  pay  from  him  would  be  of 
little  use,  because  your  wages  are  fixed  by  the 
competition  for  your  job. 

The  census  does  not  report  the  wages  paid  to 
the  four  million  agricultural  laborers.  The  De- 
partment of  Agriculture  report  for  1890  gave 
the  average  wages  of  farm  hands  with  board 
for  the  whole  country  as  $12.45  a  month;  this 
of  course  varies  with  the  locality  and  season. 
We  read  of  offers  of  $4  and  $5  a  day  "out 
West "  in  the  busiest  harvest  season.  But  those 
who  are  deluded  into  making  the  trip  find  that 
those  wages  are  largely  ghost  stories  or  adver- 
tisements, that  the  work  offered  lasts  only  a  few 
weeks,  and  that  afterwards  there  is  absolutely 
no  opportunity  to  labor  within  hundreds  of 
miles. 

We  can  only  conjecture  the  share  of  the  an- 
nual production  of  wealth  which  goes  to  the 
farmers,  whether  tenants  or  owners,  who  num- 
ber one-fifth  of  those  engaged  in  gainful  occu- 
pation. But  the  pitiful  share  which  they  own 
of  the  "  permanent  wealth  "  shows  that  they,  too, 
fail  to  receive  their  share  of  the  annual  product. 


CHAPTER    V 

WHO    GETS    THE    WEALTH    PRODUCED? 

THE  prosperity  of  a  nation  is  indicated  by 
its  material  wealth.  The  more  general  the 
distribution  of  this  wealth  the  greater  the  com- 
fort, happiness  and  prosperity  of  each  of  us. 
We  have  seen  that  the  workers  get  but  a  small 
share  of  the  annual  production  of  wealth.  How 
is  the  permanent  wealth  in  the  United  States 
distributed? 

The  total  wealth  of  the  nation  in  1900  was 
estimated  by  the  Bureau  of  Statistics  at  ninetj^- 
four  billioUj  three  hundred  million  dollars  ($94,- 
300,000,000).  Of  this  sum  by  far  the  greater 
portion  is  land  values.  Properly  speaking, 
land  is  not  wealth,  but  merely  the  opportunity 
for  the  creation  of  wealth.  However,  under 
present  conditions  it  is  wealth  to  the  individual 
owner,  and  it  is  always  estimated  as  wealth  in 
statistical  work.  About  60  per  cent,  of  the  whole 
is   made  up   of   these    land  values    (excluding 

63 


MONEY   MAKING  64 

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mines,  quarries,  railroad  rights  of  way  and  fran- 
chises in  streets). 

Land  being  the  first  and  greatest  necessity  of 
man,  the  greatest  prosperity,  even  under  the 
present  system  of  land-holding,  would  require  a 
general  distribution  of  this  fundamental  neces- 
sit}''.  Let  us  see  our  actual  condition.  The  data 
as  to  home  ownership  show  on  June  1st,  1900, 
about  16,187,715  families,  or  a  total  of  that 
many  homes,  owned  or  rented.  The  census 
"home"  often  means  rooms;  there  are  only  14,- 
430,145  dwellings. 

The  number  of  families  occupying  homes 
owned  free  of  incumbrance  was  4,761,211,  or  31 
per  cent. 

Owning    and    occupying    mortgaged    homes 2,196,375  or  15% 

Paying    rent  * 8,365,739  or  54% 

*  These  figures  are  conservative,  as  they  include  only  the 
tenures  definitely  stated.  There  are  300,000  families  owning 
homes  not  reported  as  to  incumbrance,  of  which  the  majority  are 
probably  mortgaged.  There  are  562,000  reported  of  unknown 
tenure,  doubtless  mostly  tenants.  The  free  and  clear  home  is 
most  likely  to  be  reported  definitely  to  the  enumerator,  but  the 
percentages  given  out  by  the  census  bureau  count  unreported 
and  unclassified  homes  as  being  owned,  or  as  being  free  and 
clear,  in  the  same  proportion  as  those  reported. 

Drawn  from  the  Census. 


65  MONEY    MAKING 

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In  those  ten  years  the  ownership  of  homes  has 
changed  thus:  Out  of  every  hundred  homes,  2 
less  are  owned  free  and  clear,  1  more  is  mort- 
gaged, and  1  more  is  rented  than  in  1890. 

Rent  is  always  the  first  demand  to  be  met  out 
of  the  earnings  of  labor.  Estimating  the  aver- 
age rent  of  homes  of  all  classes  at  $200  a  year, 
and  estimating  the  annual  payments  of  interest 
on  mortgaged  homes  at  the  same  amount,  we 
have  over  $2,000,000,000,  less  the  amount  paid 
in  taxes,  annually  transferred  into  the  pockets 
of  ten  per  cent,  of  the  population  through  rent 
paid  to  them  for  property  used  only  as  homes. 
Rent  or  royalty  is  paid  also  for  real  estate  used 
for  business  purposes,  mines,  cattle  ranges, 
ranches,  and  various  other  uses,  and  for  farm 
land  above  the  $200  just  estimated  as  payment 
for  homes.  Suppose  the  rent  for  all  these  other 
classes  of  property  combined  to  be  equal  only 
to  the  amount  paid  for  homes,  it  makes  an  an- 
nual rent  bill  of  four  billion  dollars;  more  than 
the  total  value  of  farm  products. 

More  than  half  of  the  families  are  actually 
tenants,  and  consequently  have  no  share  in  real 


MONEY   MAKING  66 

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estate  values;  on  the  contrary,  advances  in  land 
prices  put  added  burdens  on  them  in  the  form 
of  increased  rent.  Besides,  fifteen  per  cent,  of 
the  families  occupy  mortgaged  homes  and 
farms.  While  these  may  get  some  of  the  benefit 
of  increased  land  values,  most  of  them  have 
building  sites  or  farms  that  increase  in  value 
slowly,  if  at  all ;  many  are  trying  to  clear  a  little 
home  and  will  find  the  improvement  losing  more 
value  than  the  land  gains;  and  most  of  these 
mortgagors  are  in  reality  tenants  (as  they  are 
in  theory  of  law,  holding  under  the  superior 
right  of  the  mortgagee) ,  paying  an  annual  trib- 
ute equal  to  rent.  If  we  estimate  that  two- 
thirds  of  the  mortgagors  are  reall}^  tenants,  we 
have  only  35  in  each  hundred  of  the  population 
owning  any  land  values  whatever. 

But  included  in  this  class  of  "  owners "  are 
those  who  own  no  more  than  the  home  they 
occupy,  and  these  must  be  deducted  to  find  the 
landlord  class.  Professor  J.  G.  Collins,  a  sta- 
tistician who  had  charge  of  some  of  the  1890 
census  inquiries,  estimated  that  only  about  ten 
per  cent,  of  the  population  were  landlords,  and 


67  MONEY    MAKING 

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these  owned  and  controlled  somewhere  near  90 
per  cent,  of  the  total  land  values  of  the  nation. 

In  New  York  City  88  in  every  hundred 
families  are  tenants,  in  Boston  81,  and  Phila- 
delphia, the  "  City  of  Homes,"  77  in  every 
hundred.  In  the  160  cities  of  at  least  25,000 
inhabitants  each,  the  average  number  of  tenants 
is  74  in  a  hundred.* 

Nor  is  it  only  in  the  large  cities  that  the  pro- 
portion of  tenants  is  disquieting.  There  is  not 
one  State  or  territory  (except  Alaska)  where 
less  than  40  per  cent,  of  the  families  are  tenants. 

*  "  In  his  special  message  to  the  Legislature,  Governor  Murphy 
of  New  Jersey  seems  to  prove  that  a  high  death  rate  from 
tuberculosis,  as  well  as  the  noticeably  rapid  development  among 
our  youth  of  criminal  inclinations,  are  both  due  to  most  un- 
satisfactory   and   threatening   tenement   conditions   in   this   State. 

"  There  are  in  this  State,  or  rather  in  the  seven  largest  cities 
thereof,  no  less  than  10,000  tenement  houses,  occupied  by  over 
50,000  families,  or,  in  all,  about  300,000  persons.  The  Tenement 
House  Commission  has  ascertained  that  many  tens  of  thousands 
of  these  live  in  utter  squalor  and  wretchedness,  while  the  ma- 
jority of  the  remainder  hardly  more  than  exist,  such  are  the 
highly  unfavorable  conditions  under  which  they  are  compelled 
by  force  of  circumstances,  to  seek  to  maintain  life. 
New  Jersey  is  noted  for  its  well-appointed,  prosperous,  happy 
homes,  and  the  knowledge  of  the  existence,  within  its  bound- 
aries, of  so  many  thousand  disease-breeding,  crime-producing 
places  of  habitation  is  most  disconcerting,  to  say  the  least." — 
Elizabeth,   N.  J.,   Times,   Feb.   4,   1904. 


MONEY    MAKING  68 

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And  in  only  seven  ( Idaho,  Iowa,  Nevada,  North 
Dakota,  Oklahoma,  Utah  and  Wisconsin)  are 
less  than  half  the  families  tenants. 

The  large  and  increasing  percentage  of  ten- 
ants is  often  attributed  to  the  "  shiftlessness  "  of 
the  negro,  or  "pauper"  immigration,  though 
pauper  immigration  has  been  nearly  cut  off  and 
though,  as  Booker  T.  Washington  shows  in 
his  report  for  1908,  the  number  of  negro  land 
holders  has  greatly  increased  in  the  last  ten  years. 
But  the  native  white  American  is  but  little  bet- 
ter off.  Of  farm  homes  occupied  by  native 
whites,  32  per  cent,  are  hired,  and  of  other  than 
farm  homes,  61  per  cent.  Nearly  half  (49  per 
cent.)  of  native  white  Americans  are  tenants. 

It  is  not  a  question  of  race  or  nationality,  or 
location  or  occupation.  These  affect  the  con- 
dition but  slightly.  Nor  is  it  a  mere  question 
of  percentages:  the  important  fact  is  that  the 
inhabitants  of  the  United  States  are  losing  pos- 
session of  the  soil  of  their  country.* 


*  To  facilitate  comparisons,  the  census  percentages  for  various 
classes  alluded  to  in  the  text  are  assembled  in  one  table  (see 
bottom  page   69). 


69  MONEY   MAKING 

IN    FREE    AMERICA 

In  1850  De  Tocqueville  said  truly  enough: 

"  In  America  there  are,  properly  sj)eaking,  no 
farming  tenants;  everyone  owns  the  ground  he 
tills." — ("Democracy  in  America,"  Chap,  vi., 
vol.  ii.  p.  226). 

Agriculture  is  the  primary  industry,  upon  the 
prosperity  of  which  all  other  industries  depend, 
and  it  employs  the  greatest  number  of  people,  so 
those  engaged  in  that  industry  naturally  ought 
to  acquire  a  large  share  of  the  total  wealth.  But 
this  is  not  the  case. 

The  total  nimiber  of  farms  in  the  United 

Tenure  of  families  in  United  States:  in  percentages: 

Free 

and  Mort- 

Clearj  gaged.     Hired. 

All  homes   in   United  States 31.8         14.7         53.5 

Farm   homes    44.4  20.0         35.6 

Other  than  farm  homes 23.4         12.9        63.7 

Other  than  farm  homes,  subdivided: 
160     cities     of     at     least     25,000 

population      14.5         11.2         74.3 

*  Outside  of  these  cities    36.0         13.0        51.0 

Tenure  of  native  white  families: 

All   homes    35.7  15.4  48.9 

Farm    homes     48.1  20.1  31.8 

Other  than  farm  homes    27.0  12.1  60.9 

*  Computed  from  census  figures.  The  other  percentages  are 
those  of  the  census. 


MONEY   MAKING  10 

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States  according  to  the  census  is  5,737,372. 
These  support  a  farm  population  of  about  28,- 
000,000  people.  The  value  of  these  farms,  in- 
cluding buildings,  improvements,  farm  imple- 
ments, and  live  stock,  is  over  twenty  thousand 
millions  ($2,439,000,000),  or  a  little  over  one- 
fifth  of  the  total  wealth,  while  the  agricultural 
population  is  about  35  per  cent,  (over  a  third) 
of  the  total  population.  So  that  one-third  of 
the  people  farm,  but  have  in  their  hands  only 
about  one-fifth  of  the  wealth. 

And  of  these  farm  families  about  35  per  cent, 
are  tenants  and  20  per  cent,  occupy  mortgaged 
homes,  only  45  per  cent,  owning  free  and  clear 
farms.  So  that,  not  only  is  there  less  wealth 
among  the  agriculturists  than  among  an  equal 
number  of  the  rest  of  the  people,  but  a  large 
part  of  this  wealth  does  not  belong  to  the  agri- 
culturists. 

Nor  does  the  possession  of  "  wealth "  enable 
the  farmer  to  make  a  much  better  living  than 
is  made  by  the  penniless  wage-earner;  else  so 
many  farmers  would  not  abandon  their  farms. 
There  are  not  many  statistics  on  the  earnings  of 


71  MONEY   MAKING 

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farmers,  but  once  in  a  while  something  throws 
a  sideHght  upon  rural  conditions. 

The  Wisconsin  Tax  Commission  sent  out  in 
1899  a  series  of  questions  to  6,000  farmers  scat- 
tered throughout  the  State.  They  estimated  the 
average  value  of  their  farms  at  $5,000.  There 
were  only  656  who  reported  in  detail  the  gross 
income  of  their  farms,  the  farm  expenses,  and 
net  income.  This  net  income  averaged  $310  for 
the  year,  and  out  of  this  $40  direct  tax  had  to 
be  paid.  Of  course  these  farmers  got  housing 
and  much  of  their  food  in  addition  to  that  net 
value.  But  after  buying  clothes  and  groceries, 
and  paying  about  one-eighth  of  his  income  for 
direct  taxes,  how  long  would  it  take  one  of  them 
to  save  even  twenty  thousand  dollars  from  his 
earnings? 

You  are  told  that  the  people  have  their  money 
in  the  savings  banks,  which  reported  more  than 
eight  million  deposit  accounts  last  year,  averag- 
ing $400  each.  But  each  of  these  does  not  rep- 
resent a  separate  depositor;  and  they  are  largely 
the  savings  of  those  who  are  not  poor.  Stand 
before  the  savings  banks  in  New  York  and 


MONEY   MAKING  'J'3 

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Philadelphia  and  other  large  cities,  and  you  will 
see  depositors  driving  up  in  carriages.  The 
Massachusetts  Labor  Bureau  investigated  this 
question  in  1873,  and  reported  that  in  that  State 
persons  not  wage-earners  were  depositors  to  at 
least  one-half  the  total  amount  on  deposit;  that 
wealthy  people  used  savings  banks  to  escape 
taxation  and  the  care  of  other  investments ;  that 
they  deposit  for  themselves  to  the  legal  limit, 
open  accounts  for  members  of  their  family,  and 
accounts  as  trustee.  (The  writer  is  not  a  rich 
man,  but  he  has  seven  savings  bank  accounts  in 
his  own  family)  .* 

But  who  then  has  the  wealth? 

The  total  estimated  wealth  is  more  than  one 
hundred  billion  dollars  ($107,000,000,000)  in 
1908. 

If  equally  distributed  the  family  average 
would  be,  in  round  numbers,  $6,000. 

It  is  not  at  all  equally  distributed.  In  the 
Political  Science  Quarterly,  1893,   George  K. 

*  The  New  York  Times  of  June  27,  1904,  says  that  the  probate 
of  the  will  of  Mrs.  Martha  Moeller,  one  of  the  victims  of  the 
Slocum  disaster,  showed  her  to  be  worth  over  $100,000,  tlie  greater 
part  of  which  was  "money  on  deposit  in  many  savings  banks." 


73  MONEY    MAKING 

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Holmes,  an  expert  statistician  employed  on  the 
census,  calculated  the  probable  distribution  of 
wealth  in  1890.  (The  census  of  1900  omits  data 
upon  which  to  base  a  similar  calculation.)  He 
estimated  that  of  the  total  families  in  the  United 
States 

52  per  cent,  owned     5  per  cent,  of  the  wealth 

39  per  cent,  owned  24>  per  cent,  of  the  wealth 

9  per  cent,  owned  71   per  cent,   of  the  wealth 

This  small  wealthy  class  can  be  further  sub- 
divided. The  New  York  Tribune  published  a 
list  of  4,047  families  sixteen  years  ago,  estimat- 
ing their  total  wealth  at  twelve  billion  dollars. 
But  other  estimates  placed  it  at  fifteen  billion 
dollars,  and  it  certainly  has  increased  to  much 
more  than  that  amount  by  this  time. 

This  group  of  millionaire  families  represents 
about  20,000  individuals  and  controls  at  least 
one-sixth  of  the  aggregate  wealth  of  the  coun- 
try. Otherwise  stated,  one  person  in  each  4,000 
has  an  average  of  $750,000,  while  the  remaining 
3,999  in  each  4,000  have  an  average  of  $1,000  to 
each  person. 

But  this  does  not  prove  that  most  of  these  re- 


MONEY   MAKING  74 

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maining  persons  have  a  thousand  dollars.  The 
man  who  tried  to  wade  across  a  stream  whose 
"  average  "  depth  was  two  feet,  was  drowned. 

Taking  Mr.   Holmes'  calculation  as  a  basis 
(though  the  concentration  of  wealth  has   in- 
creased since  1890),  the  distribution  in  1900  was 
about  as  follows: 

Families.  Owned.  Family   Average. 

8,417,612      $4,715,000,000  $560 

In  his  careful  essay  on  "  The  Distribution  of 
Wealth  in  the  United  States,"  Charles  B.  Spahr 
estimated  that  in  1890  the  poorer  classes  were 
41  per  cent,  of  the  total,  or  5,500,000  families, 
with  an  average  wealth  of  $150;  and  that 
"  seven-eighths  of  the  families  held  but  one- 
eighth  of  the  national  wealth,"  while  one  per 
cent,  of  the  population  owned  more  than  half 
the  wealth.* 

Rockefeller  alone  is  generally  believed  to  own 
more  than  one-hundredth  part  of  it  himself. 

Enough  statistics  have  been  given  to  show  (if 
anyone  has  ever  really  doubted  it)    that  even 

*  Mr.  Spahr's  calculations  are  derived  from  census  returns 
checked  by  probate  records  and  other  data,  and  are  conservative, 
as  will  be  seen  by  reading  his  book.  For  other  computations, 
see  Currency  and  Wealth,  by  George  S.  Waldron. 


16  MOXEY   MAKING 

IN    FREE    AMERICA 

with  all  the  restrictions  placed  on  industry  there 
is  enough  wealth  produced  annually  to  give 
every  person  employed  in  productive  industry  a 
comfortable  living  for  himself  and  family.  That 
so  many  have  only  a  bare  existence  is  due  neither 
to  niggardliness  of  nature  nor  to  lack  of  produc- 
tive power  and  skill  of  men.  It  is  because  the 
few  have  been  able  to  get  more  than  their  share. 
How  they  have  obtained  it  will  be  considered 
further  on. 

I  do  not  advocate  dividing  this  up.  That 
would  be  neither  just  nor  practical.  I  show  only 
how  all  may  get  equal  opportunities  of  acquir- 
ing wealth  and  be  no  longer  deprived  of  it. 

But  remember,  that  large  as  is  the  sum  of 
which  labor  is  despoiled,  it  is  small  compared 
to  the  sum  which  is  lost  to  the  nation  because 
natural  resources  are  kept  idle,  land  being 
poorly  used,  or  kept  entirely  out  of  use.  Be- 
cause labor  cannot  be  used  with  the  highest 
efficiency  by  getting  at  the  best  land,  and  with 
the  best  tools,  and  because  recurring  depressions 
bring  about  increased  idleness,  the  total  product 
of  the  nation  and  of  each  of  us,  is  but  a  fraction 
of  what  it  might  be. 


CHAPTER  VI 

MONOPOLIZED    AMERICA 

"  The  land  question  means  hunger,  thirst,  nakedness, 
notice  to  quit,  labor  spent  in  vain,  the  toil  of  years  seized 
upon,  the  breaking  up  of  homes,  the  misery,  sickness, 
deaths  of  parents,  children,  wives,  the  despair  and  wild- 
ness  which  spring  up  in  the  hearts  of  the  poor,  when  legal 
force,  like  a  sharp  harrow,  goes  over  the  most  sensitive 
and  vital  rights  of  mankind.  All  this  is  contained  in  the 
land  question." — Cardinal  Manning. 

^7"  OU  see  the  cause  of  hard  times  does  not  lie 
-*■  in  any  lack  of  natural  resources,  or  of 
skilled  and  industrious  men  to  work,  and  that 
the  talk  of  "  over-production  "  is  only  a  phrase 
used  by  "  economists  "  to  hide  their  ignorance  or 
to  impose  on  ours.  With  areas  of  fertile  soil 
capable  of  feeding  a  thousand  million  people, 
with  forests  and  quarries  and  brick-clay  deposits 
enough  to  make  houses  for  a  thousand  million 
people;  with  iron  and  coal  enough  to  make  and 
run  machinery  for  a  thousand  million  people; 
with  cotton-growing  land  enough  to  make  cloth- 
ing for  a  thousand  million  people;  this  country 
finds  itself  unable  to  support  in  comfort  eighty- 
six  millions.    Why?    Is  there  a  scarcity  of  capi- 

76 


7T  '  MONEY    MAKING 

IN    FREE    AMERICA 

tal;  that  is,  of  labor  products  which  can  be  used 
in  aiding  to  make  more  things?  By  no  means. 
In  the  complex  diversification  of  modern  indus- 
try, capital  is  an  important  factor,  but  there  is 
plenty  of  it  now  eager  to  find  borrowers.  Capi- 
tal is  over-abundant,  so  that  it  cannot  find  op- 
portunities for  investment.*  Besides,  if  intelli- 
gent and  energetic  men  are  allowed  to  utilize 
the  resources  of  the  earth,  they  will  quickly 
produce  their  own  capital  in  the  only  way  capital 
is  ever  produced;  that  is,  by  human  efforts  ap- 
plied in  using  natural  forces. 

To  create  wealth,  whether  for  capital  or  for 
consumption,  all  that  is  necessary  is  labor  and 
land.  You  can  see  that  we  have  an  abundance 
of  natural  resources,  an  abundance  of  skilled 
labor,  and  an  abundance  of  capital.  Yet  there 
is  involuntary  poverty,  idleness  and  widespread 
business  depression. 

The  real  reason  for  this  deplorable  condition 
of  affairs,  must  be  found  elsewhere  than  in  the 
current     explanations.     This     reason     can     be 

*  Says  the  N.  Y.  Times  of  Aug.  10,  1908:  In  money  markets 
the  event  of  the  week  was  easily  the  dechne  of  call  money  rates 
to  the  year's  low  quotation  of  three-quarters  of  1  per  cent." 


MONEY   MAKING  78 

IN    FREE    AMERICA 

summed  up  in  one  word — "Monopoly."  It  is 
because  free  America  has  become  Monopolized 
America,  that  great  facilities  for  producing 
wealth,  a  great  volume  of  labor  products,  and 
great  riches  in  the  hands  of  a  few,  confront 
armies  of  under-paid,  underfed  and  ill-clothed 
workmen.  Men  and  women  who  seek  in  vain 
for  work  are  kept  in  idleness  by  Monopoly. 
Those  who  find  work  have  their  earnings  filched 
by  JNIonopoly.  The  farmer  pays  high  prices  for 
freight  and  passenger  rates  to  Monopoly,  and 
has  the  price  of  his  products  reduced  by  Monop- 
oly, which  handles  them.  Monopoly  controls 
employment  and  levies  toll  upon  laborers,  manu- 
facturers, merchants  and  professional  men.  The 
vast  stores  of  iron,  coal  and  other  minerals  are 
controlled  by  Monopoly.  The  forests  are  fenced 
in  against  the  men  who  want  to  cut  lumber  or 
fuel.  The  fertile  land  is  held  unused.  On  eveiy 
side  the  application  of  strong  arms  and  quick 
hands  to  the  earth,  or  to  materials  drawn  from 
it,  is  forbidden  by  some  Monopoly.  It  stands 
in  the  way  of  national  development,  and  out  of 
the  promise  of  a  commonwealth  of  freedom  and 


79  MONEY   MAKING 

IN   FREE    AMERICA 

equality,  has  created  plutocracy  and  the  widest 
inequalit}^ 

Born  of  the  ignorance  of  the  masses,  mated 
to  the  cunning  of  the  few  who  profit  by  it, 
monopoly  has  grown  until  it  overshadows  the 
country  from  Maine  to  Florida,  and  from 
Texas  to  Washington.^ 

Monopoly  invades  every  department  of  indus- 
try, and  unless  tribute  is  paid,  it  closes  factories 
and  shuts  down  mills.  By  the  magic  of  fran- 
chises and  special  privileges  fenced  by  law,  it 
stretches  out  its  long  arms  and  draws  into  its 
capacious  strong-boxes  the  earnings  of  the  peo- 
ple. 

But  the  chief  injury  inflicted  by  monopoly  is 
not  in  what  it  takes  from  the  producers ;  it  is  in 
its  power  to  check  production  by  holding  out  of 
use,  or  out  of  full  use,  that  without  which  men 
cannot  create  wealth.  Many  men  cannot  get 
work  because  a  few  men  control  the  opportuni- 
ties for  work.  In  spite  of  the  enormously  in- 
creased facilities  for  producing  wealth,  the  num- 
ber of  the  poor  is  steadily  increasing,*  because 

*  See  chapter  on  The  Charity  Problem. 


MONEY   MAKING  80 

IN    FREE    AMERICA 

more  and  yet  more  tribute  is  exacted  in  return 
for  allowing  men  to  live  and  work;  and  vast 
opportunities  are  withheld  so  as  to  squeeze  the 
last  penny  of  tribute  for  the  use  of  the  rest. 

Perhaps  you  have  never  thought  of  the  ex- 
tent to  which  this  "  our  country  "  belongs  to  a 
few"  of  us.  Here  are  facts  and  figures.  Of 
course  statistics  are  always  puzzling;  maybe  you 
have  a  shrewd  idea  that  they  can  be  used  to 
prove  almost  anything,  but  if  you  want  to  con- 
sider why  more  wealth  is  not  produced,  and 
how  so  much  of  that  which  is  produced  is  drained 
away  from  those  who  make  it,  it  will  pay  to 
read  carefully  the  rest  of  this  chapter. 

Look  first  at  the  control  of  natural  re- 
sources:— land  fit  for  cultivation,  mineral  lands 
and  forests.  On  this  point  the  facts  are  well 
known.  Through  reckless  gifts  of  our  public 
lands,  all  the  great  domain  of  prairie,  forest 
and  mines  is  now  owned  by  individuals  or  cor- 
porations. The  national  policy  of  granting 
homesteads  was  wise  and  just,  in  so  far  as  the 
land  was  given  to  men  who  use  it.  But  the  gov- 
ernment did  not  stop  with  grants  to  settlers. 
Immense  areas  of  most  fertile  soil  were  given  to 


81  MONEY    MAKING 

IN    FREE    AMERICA 

railway  companies  and  other  great  corporations; 
vast  tracts  of  forest  land  were  sold  for  a  trifle 
or  granted  away,  and  the  mineral  deposits,  coal, 
iron,  oil,  and  so  on,  were  handed  over  to  a  few 
individuals.  The  grants  to  railroads  have  ex- 
ceeded the  amount  acquired  by  individuals  under 
the  Homestead  Act.  (Report  Public  Lands 
Commission,  Sen.  Rec.  189,  58th  Congress,  3rd 
session). 

As  a  sample  of  the  manner  in  which  America 
has  been  disposed  of,  take  the  grants  to  railways. 
To  record  all  the  wholesale  throwing  away  of 
the  people's  land  would  take  a  book  of  this  size. 
Here  are  a  few  items.  To  the  Northern  Pacific 
Railway  42  million  acres  were  given;  to  the 
Union  Pacific  16  million;  to  the  Central  Pacific 
15  million;  and  to  the  Southern  Pacific  14  mil- 
lion. The  Texas  Pacific  Railway  got  13  million 
acres.  The  Oregon  Central,  a  comparatively 
short  road,  got  4,700,000.  The  Burlington  k 
Missouri  Railway  was  presented  with  3,873,000 
acres.  And  the  list  might  be  continued  until  a 
total  was  reached  of  over  200  million  acres  given 
to  railroads  alone.* 

*The  total   area   of  land  granted  by  Congress   for   building 


MONEY   MAKING  82 

IN    FREE    AMERICA 

Do  you  realize  what  this  means?  It  means 
that  a  few  corporations,  which  received  also 
franchises  of  enormous  value,  have  been  given 
a  greater  acreage  of  fertile  lands  than  the  en- 
tire land  area  now  included  in  the  thirteen  orig- 
inal States.  Suppose  the  proposition  had  been 
made  in  1789  to  give  all  the  States  won  from  the 
British  at  the  cost  of  so  many  lives,  to  a  few 
companies.  What  would  Washington  or  Jef- 
ferson have  said? 

Then  turn  to  private  land  owners  and  syndi- 
cates. During  the  past  fifty  years  almost  the 
entire  area  of  the  fertile  lands  west  of  the  Mis- 
sissippi has  been  gobbled  up,  part  of  it  being 
subsequently  sold  to  actual  settlers,  and  the  rest 
held  as  a  speculation  until  increasing  population 
should  force  the  public  to  yield  to  extortionate 
terms. 

Frederic  Weyerhaeuser  is  called  the  "  timber 
land  king,"  and  owns  or  controls  all  the  valuable 

railways  was  215,000,000  acres;  though  not  all  railways  were 
built.  The  land  office  estimated  that  the  area  taken  was  178,- 
000,000  acres.  (Ex.  Doc.  42,  Forty-sixth  Congress.)  But  some 
railways  fenced  in  much  more  land  than  was  granted  to  them. 
And  in  addition  to  the  national  grants,  the  State  of  Texas  gave 
38,000,000  acres  to  railways. 


8S  MONEY   MAKING 

IN   FREE    AMERICA 

timber  lands  from  the  Wisconsin  Lakes  to  the 
Pacific  Coast.  He  began  seeking  timber  tracts 
about  1857,  buying  Chippewa  lands.  An  idea 
of  the  increase  in  value  may  be  gained  from  the 
reports  about  two  instances;  one  piece  in  West 
Virginia  worth  five  years  ago  $12,000,  is  said 
to  be  worth  to-day  $500,000.  He  has  probably 
30,000,000  acres,  nearly  50,000  square  miles,  un- 
der his  control — an  area  equal  to  about  six  times 
the  State  of  New  Jersey. 

The  methods  of  acquisition  of  timber  land 
were  frequently  dishonest.  Much  of  the  land 
was  acquired  by  "  homesteading  "  and  cheating 
the  government.  But  the  biggest  steal  was  ac- 
complished in  1897  when  Congress  passed  the 
lieu-selection  bill,  allowing  the  exchange  of  lands 
which  fell  within  the  proposed  forest  reserva- 
tion tracts,  for  other  government  land  in  tracts 
of  same  size.  Having  almost  denuded  the  forest 
lands  then  in  the  control  of  the  Weyerhaeuser 
interests,  this  syndicate  exchanged  its  exhausted 
lands  for  new  timber  tracts  in  Montana  and 
other  Western  States,  thus  making  tremendous 
profit  out  of  a  law. 


MONEY   MAKING  84 

IN    FREE    AMERICA 

Burton  J.  Hendrick  says  that  the  Astor  for- 
tune amounted  in  1905  to  $450,000,000.  The 
late  rise  in  New  York  City  vakies,  due  to  an- 
nexing the  mainland  by  tunnels  at  the  expense 
of  the  people,  must  make  it  over  half  a  billion  by 
this  time. 

Mr.  R.  F.  Powell  of  Fairhope,  Alabama,  re- 
ports that  "  The  Capital  Freehold  Investment 
Company  (principal  office  in  Chicago)  owns 
3,000,000  acres  in  the  Panhandle  at  Texas  bor- 
dering on  New  Mexico.  John  Pierce  Trespi- 
laches,  Metagarda  Co.,  Texas,  owns  85,000 
acres  in  that  county.  The  Duke  of  Sutherland 
and  other  Englishmen  are  heavy  investors  in 
that  Company." 

Nor  is  the  ownership  of  America  confined  to 
the  aristocracy.  Plain  William  Scully,  an  Irish- 
man, managed  a  number  of  years  ago  to  se- 
cure possession  of  large  tracts  of  land  in  Illinois, 
Iowa  and  Nebraska.  The  income  from  these 
lands,  as  fast  as  they  found  tenants,  was  used  to 
buy  more  land,  so  that  Mr.  Scully  owned  at  his 
death  over  300,000  acres.  Whether  it  is  any 
easier  for  a  tenant  farmer  to  pay  rent  to  a 


85  MONEY    MAKING 

IN   FREE    AMERICA 

"  Mr."  than  to  a  "  Sir  "  or  a  "  Duke,"  is  a  ques- 
tion which  awaits  an  answer.  In  fact  Scully  is 
often  spoken  of  as  "  Lord  "  Scully, 

There  is,  however,  a  growing  sentiment  in 
America  against  alien  ownership  of  land,  and 
it  has  been  urged  by  many  reformers  that  Con- 
gress should  pass  a  law  forbidding  aliens  to  own 
land  in  this  country.  This  suggests  the  further 
question,  whether  it  is  any  easier  to  pay  rent  to 
a  citizen  of  Boston  or  Baltimore  than  to  a  citi- 
zen of  London  or  Berlin. 

What  has  been  done  by  the  syndicates  and  by 
Mr.  Scully  has  been  done  on  a  smaller  scale  by 
thousands  of  other  corporations  and  landlords, 
until  now  there  remains,  in  all  the  great  terri- 
tory of  the  United  States,  practically  no  land  of 
any  present  or  probable  value  which  can  be  used 
without  paying  someone  for  its  use.  East, 
West,  North  or  South,  wherever  wheat  or  cotton, 
corn  or  sugar  or  anything  can  be  profitably 
raised,  everywhere  there  is  the  sign  "No  Tres- 
passing Allowed."  The  man  who  wants  to  work 
on  the  soil  finds  that  in  every  direction  someone 
has  been  ahead  of  him  and  has  obtained  the  ex- 


MONEY   MAKING  86 

IN    FREE    AMERICA 

elusive  title  to  the  use  of  all  the  land  that  is 
worth  anything.  To-day  a  baby  has  no  right  to 
be  born  on  the  land,  or  even  to  be  buried  in  it, 
unless  someone  will  pay  for  its  grave. 

And  as  with  farm  lands,  so  also  with  timber 
and  mineral  lands.  The  pines  of  Michigan, 
Wisconsin  and  Minnesota,  the  gigantic  red- 
woods and  other  timber  on  the  Pacific  slope,  the 
dense  forests  of  Florida  and  Mississippi,  and 
the  spruce  woods  of  JNIaine,  all  have  owners  who 
demand  "stumpage"  for  each  tree  cut.  It  is 
true  that  some  of  these  forests  are  owned  by 
companies  which  cut  the  lumber  from  them,  but 
in  these  cases  the  charge  for  permission  to  work 
on  timber  lands  is  just  as  certainly  paid  by 
those  who  use  the  lumber.  No  tree  is  so  remote 
from  civilization  as  not  to  have  an  owner,  who 
takes  care  that  no  idle  workman  shall  employ  his 
time  in  converting  it  into  a  useful  article. 

The  representative  of  the  Long  Island  Rail- 
road writes  in  1908:  "In  our  work,  we  have 
had  a  very  great  number  of  applications  for 
small  plots,  not  big  farms,  yet  it  has  been  im- 
possible to  find  anjT^body  willing  to  divide  up 


87  MONEY   MAKING 

IN   FREE    AMERICA 

and  sell  say  5  and  10  acres.  The  Railroad  was 
able  to  get  18  acres  at  Wading  River,  simply 
because  it  was  a  part  of  2,000  acres  isolated  by 
the  Railroad  from  the  rest  of  the  2,000.  At 
Medford,  we  had  to  buy  80  acres  to  get  10  for 
our  agricultural  experiment." 

These  places  are  some  fifty  miles  from  New 
York. 

As  Marx  writes  in  his  annotations  to  the  pro- 
gram of  the  German  Labor  party  {Interna- 
tional Socialist  Review,  vol.  viii.,  pp.  643,  646) : 
"  In  the  society  of  to-day  the  means  of  labor  are 
monopolized  by  the  landed  proprietors;  mo- 
nopoly of  landed  property  is  even  the  basis  of 
monopoly  of  capital  and  by  capitalists." 

The  control  of  mineral  lands  is  still  closer 
than  that  of  farm  or  timber  land.  The  great 
anthracite  coal  deposits  of  Pennsylvania  are  in 
the  firm  grip  of  a  few  persons  and  railway  cor- 
porations who  well  know  the  enormous  value  of 
their  exclusive  privilege.*     Having  control  of 

*  The  Anthracite  Strike  Commission  accepted  as  accurate 
the  statement  that  91  per  cent,  of  the  anthracite  lands  are 
owned  by  the  six  railroads  and  their  subsidiary  companies,  and 
5  per  cent,  more  are  controlled  by  them.     (Report  Dept.  Labor, 


MONEY    MAKING  88 

IN    FREE    AMERICA 

the  onlj^  anthracite  coal  mines  in  the  country, 
these  men  and  companies  have  combined  to  limit 
the  production  of  coal  and  to  raise  its  price.  So 
effectively  has  this  combination  worked  that  the 
price  of  coal  is  now,  on  an  average,  one  dollar 
and  a  half  per  ton  more  than  it  was  five  years 
ago,  and  the  increasing  demand  for  coal  enables 
the  combine  to  give  the  screw  other  turns  and 
force  the  price  higher  and  higher. 

They  force  the  price  up  notwithstanding  the 
superabundance  of  coal.  President  Fowler,  of 
the  New  York,  Ontario  &  Western  R.  R.,  testi- 
fied in  1900  that  "  without  some  restriction," 
by  which  he  meant  railroad  control,  "  coal  would 
be  a  drug  in  the  (New  York)  market  at  $2  a 
ton."  You  can  read  all  about  the  anthracite 
coal  monopoly  at  the  end  of  Dan  Beard's 
"  Moon-blight." 

The  fields  in  which  bituminous  coal  is  found 
being  nearly  one  hundred  times  larger  than  the 
anthracite  fields,  it  has  not  been  so  easy  to  con- 
trol its  production.    Yet  every  known  coal  seam. 

May,  1903,  page  448.)  There  are  only  about  150  individual 
owners. 


89  MONEY   MAKING 

IN    FREE    AMERICA 

even  in  the  remote  mountains  of  Tennessee, 
Colorado  or  Montana,  is  "  owned  "  by  someone. 
You  can  see  on  the  Pennsylvania  coal  roads  four 
thousand  cars  as  big  as  houses  all  marked  Ber- 
wind- White  Coal  Comi^any.  But  most  of  the 
fields  are  owned  by  people  who  do  not  intend  to 
mine  coal,  but  who  expect  to  charge  others  royal- 
ties for  the  privilege  of  mining.  Every  ton  of 
coal  which  goes  to  furnish  power  for  hauling 
freight  or  turning  mill  wheels  must  pay  a  tax  or 
royalty  to  the  lord  of  the  land  out  of  which  it 
is  dug.* 

The  same  is  true  of  iron  ore,  one  of  Nature's 
most  important  gifts  to  mankind.  In  the  moun- 
tains of  Pennsylvania,  of  West  Virginia,  of 
Tennessee  and  Alabama,  and  in  the  "ranges  "  of 
Northwest  Michigan  and  Minnesota  there  are 
immense  bodies  of  the  raw  material  for  the  vari- 
ous products  of  the  iron  and  steel  industries. 

*  The  following  press  dispatch  shows  how  the  coal  lands  have 
been  gobbled  up  by  syndicates: 

Columbus,  O.,  March  23,  1897.— The  entire  Jackson  County 
coal  field  passed  into  the  hands  of  the  Krueger  syndicate  of 
London  yesterday.  The  deal  was  negotiated  by  Charles  Fisk 
Beach,  of  London,  formerly  of  New  York. 

The  purchase  price   of  the  Jackson  field  is  in  the  neighbor- 


MONEY   MAKING  90 

IN    FREE    AMERICA 

The  ]\Iesaba  ore  lands  were  acquired  by  James 
J.  Hill  as  part  of  a  railway  concession.  A  year 
or  so  ago  they  were  sold  at  a  price  reported  at 
$400,000,000. 

Although  these  ore  deposits  have  been  but 
partly  developed  there  is  evidence  of  more  than 
enough  to  supply  all  demands  for  centuries  to 
come.  Through  their  ownership  of  the  land  in 
which  the  ore  is  found,  a  shrewd  or  lucky  few 
have  made  great  fortunes,  and  in  recent  years 
the  tax  on  industry  in  the  shape  of  iron  mining 
royalties  has  been  increased  by  the  combination 
of  all  the  principal  producers  of  ore  suitable  for 
Bessemer  steel  into  a  trust  which  raised  the  price 
of  ore  from  one  to  three  dollars  per  ton.  As 
the  United  States  Steel  Corporation  has  a  prac- 
tical monopoly  of  the  iron  lands  in  the  North- 
west, and  has  through  the  tariff  a  monopoly  of 
the  domestic  market,  it  has  been  able  to  make 

hood  of  $4,000,000  and  the  following  companies  are  in  the  con- 
solidation: Superior  Coal  Company,  owned  by  C,  H.  and  D. 
Railroad;  Fluhart  Coal  and  Mining  Company,  and  sixteen 
others. 

This  is  among  the  best  bituminous  coal  fields  in  the  West. 
The  field  mines  1,600,000  tons  annually,  and  the  aggregate  busi- 
ness is  $2,500,000  per  year,  with  a  net  profit  of  $500,000.  Mr. 
Beach  says  that  this  was  the  first  investment  of  the  Krueger 
syndicate  in  this  continent,  but  to  be   followed  up  with  others. 


91  MONEY    MAKING 

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the  consumers  of  iron  and  steel  pay  at  least  20 
million  dollars  more  per  year  than  a  fair  price 
for  those  products.* 

It  would  only  waste  time  to  detail  how  other 
natural  resources  are  grabbed.  You  know  how 
the  Standard  Oil  Trust  owns  the  pipe  lines  by 
which  oil  is  pumped  across  States:  it  can  there- 
fore dictate  what  freight  rates  it  will  pay.  In 
addition  it  controls  the  valuable  oil  fields  and  it 
has  its  agents  continually  on  the  watch  for  the 
new  wells.  Just  as  soon  as  a  prospector  "  strikes 
oil "  along  comes  an  agent  and  leases  the  tract 
of  land  in  which  the  oil  has  been  found.  Not 
in  order  to  produce  oil — there  is  as  much  oil 
already  being  produced  as  can  be  sold  at  present 
prices — but  to  keep  the  land  under  its  own  con- 
trol so  that  there  will  be  no  new  competition. 

On  this  question  of  the  ownership  of  land  and 

*  Chicago  Record-Herald  (ind.  Rep.),  July  13,  1908.— Charles 
M.  Schwab,  who  has  just  returned  from  Europe,  talks  in  a  very- 
confident  way  about  a  working  agreement  that  includes  the 
the  United  States  Steel  Corporation  and  the  steel  companies  of 
Belgium,  Germany  and  Russia.  He  says  that  the  men  interested 
in  the  agreement  "  control  practically  all  the  vanadium  in  the 
world,  and  are  thus  able  to  hold  the  steel  situation  in  their  own 
hands.  ...  It  would  not  be  surprising  if  Mr.  Schwab  were 
talking  in  part  at  least  for  business  reasons  of  his  own  rather 
than  from  a  desire  to  enlighten  the  world  on  a  subject  of  great 
scientific  and  economic  interest." 


MONEY   MAKING  92 

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the  burden  it  lays  on  the  people,  the  Hon.  Henry 
A.  Robinson,  formerly  statistician  of  the  United 
States  Department  of  Agriculture,  says  that  in 
1890: 

"  The  total  royalty  of  the  mines  worked, 
stumpage  of  timber  paid,  the  rent  of  the  water 
power  and  ground  rent  of  building  sites 
amounted  to  at  least  $935,000,000." 

Mr.  Robinson  was  not  figuring  on  interest  on 
mortgages,  rents  for  railway  and  franchise 
grants,  and  other  like  items  which  enormously 
swell  the  total. 

Says  F.  T.  Carlton,  Professor  of  Economics 
and  History  in  Albion  College,  Michigan,  in 
1908: 

"  The  average  value  per  foot  front  of  the  best 
business  property  in  New  York  City  may  be  as- 
sumed to  be  $20,000,  or  approximately  $8,000,- 
000  per  acre.  Assuming  an  income  of  4  per 
cent,  from  this  valuation,  the  net  economic  rent, 
or  market  opportunity  rent,  would  be  $320,000 
per  annum.  This  amount  would  be  the  gross 
income  per  acre  from  buildings  and  lot,  minus 
all  charges  for  services  in  the  building,  taxes, 
insurance,  interest  on  the  capital  invested  in  the 
building,  depreciation  and  repairs.  This  income 
is  approximately  equivalent  to  the  average  wage 


93  MONEY    MAKING 

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paid  in  the  manufacturing  industries  of  the 
United  States  in  1900,  to  seven  hundred  and 
thirty  workmen.  The  market  opportunity  rent 
of  one  acre  in  the  heart  of  New  York  City  ab- 
sorbs, therefore,  the  equivalent  of  the  money 
wages  of  730  workmen." 

Monopoly  is  not  measured  by  area,  but  by 
value.* 

*  For  the  first  time  in  the  history  of  England,  the  Budget 
proposes  to  place  a  valuation  on  all  the  unimproved  lands;  in 
other  words  to  demonstrate  the  possibility  of  valuing  land 
apart  from  improvements,  which  the  Conservatives  have  said 
was  impossible.  This  is  the  revolutionary  element  in  the  Bud- 
get and  not  the  amount  of  money  to  be  raised  by  the  three 
kinds  of  taxes  based  upon  land  valuation.  This  amount  is  only 
$2,500,000  this  year  and  is   to   come   from  the   following: 

(1)  A  tax  of  20%  on  the  increment  of  value  accruing  to 
land  in  the  future  from  the  growth  of  the  community.  This 
tax  of  20%  is  to  be  taken  on  transfer,  death  or  sale.  It  is 
not  an  annual  tax  on  any  individual  and  is  expected  to  yield 
$250,000  the  first  year. 

(2)  A  tax  of  one-half  penny  in  the  £  on  the  capital  value 
of  land,  including  mineral  lands.  This  limited  to  undeveloped 
lands,  and  does  not  apply  to  land  of  less  than  $250  an  acre, 
and    really   exempts    agricultural   land    altogether. 

(3)  A  duty  of  10%  upon  the  value  which  accrues  to  the 
landlord  on  the  reversion  of  a  lease.  Almost  all  the  land  of 
England  is  held  under  lease  for  long  periods  of  time  with  the 
provision  that  all  improvements  revert  to  the  landlord  upon 
the  termination  of  the  lease.  The  landlords  would  pay  these 
small  taxes  without  a  murmur  if  they  did  not  realize  the  prin- 
ciple back  of  them.  This  is  what  makes  them  tremble — their 
land  will  be  valued  and  the  community  wiU  realize  that  here 
is  a  hitherto  untapped  treasure — a  treasure  which  owes  its  ex- 
istence to  society  itself.  Hence  it  may  be  further  tapped  for 
municipal  or  imperial  needs. 


CHAPTER  VII 

TRUSTS— USEFUL   OR    HARMFUL 

O  O  much  for  the  way  in  which  the  sources  of 
*^  wealth  are  cornered.  Let  us  see  how  the 
production  and  distribution  of  wealth  is  con- 
trolled. This  brings  us  to  the  question  most 
prominently  before  the  American  people  to-daj^ 
The  modern  combinations  popularly  called 
"  Trusts  "  first  appeared  between  1860  and  1870. 
They  were  generally  in  the  form  of  "  alliances  " 
and  attracted  little  attention  until  1882,  when 
the  allied  Standard  Oil  interests  formed  the 
"  Standard  Oil  Trust,"  and  originated  the  term 
"  Trust "  as  applied  to  large  aggregations  of 
capital.  Under  that  form  of  association,  the 
stockholders  of  different  corporations  trans- 
ferred their  stocks  to  trustees,  who  managed  the 
property  as  they  saw  fit.  The  irresponsibility 
of  such  trustees,  and  especially  the  iniquities  of 
the  Standard  Oil  Trust,  aroused  public  indig- 
nation, and  caused  the  enactment  of  laws  for- 

94 


95  MONEY   MAKING 

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bidding  such  "  trusts."  Since  then,  these  combi- 
nations have  generally  taken  the  form  of  Hold- 
ing Companies,  or  a  new  company  which  issues 
its  stock  in  exchange  for  the  stock  of  the  con- 
solidating concerns,  or  pays  a  guaranteed  divi- 
dend upon  their  stock  as  a  rental. 

So  now,  in  the  words  of  Mr.  S.  C.  T.  Dodd, 
solicitor  for  the  Standard  Oil  Company  (the 
successor  of  the  old  trust)  :  "  The  term  '  Trust ' 
,  .  .  has  obtained  a  wider  signification,  and 
embraces  every  act,  agreement,  or  combination 
of  persons  or  capital  believed  to  be  done,  made 
or  formed  with  the  intent,  power  or  tendency 
to  monopolize  business,  to  restrain  or  interfere 
with  competitive  trade,  or  to  fix,  influence,  or 
increase  the  prices  of  commodities." 

The  "  Trust  Question,"  as  the  phrase  is  gen- 
erally understood,  is  confined  to  the  Industrial 
trusts,  whose  nominal  capital  of  over  seven  bil- 
lion dollars  is  73  per  cent,  (say  three-quarters) 
of  the  total  manufacturing  capital  as  reported 
in  1900.  While  a  good  deal  of  trust  "  capital " 
is  water,  there  is  little  doubt  that  two-thirds  of 
all  our  manufactured  goods  are  produced   (or 


MONEY   MAKING  96 

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their  production  controlled)  by  trusts.*  It  is 
difficult  to  think  of  any  article  sold  from  store 
or  mill  the  price  of  which  is  not  fixed  to  some 
extent  by  one  or  more  trusts.  Often  a  score  of 
trusts  are  concealed  in  a  single  article.  Suppose 
you  buy  a  buggy.  It  may  or  may  not  be  a  trust 
product,  but  its  cost  depends  largel}^  upon  the 
cost  of  its  different  parts.  The  bolts,  nuts,, 
tacks,  glass,  carpets,  hardware,  nails,  leather, 
wheels  and  springs  in  it  were  probably  made  by 
trusts.  The  materials  for  the  varnish  and  paint 
used  were  also  trust  products.  Going  a  step 
further  back,  the  saws,  axes,  files,  hammers,  and 

*The  Wall  Street  Journal  of  March  17th,  1904,  makes  the 
following   significant    admission : 

"  It  should  not  be  overlooked  that  the  trust  wealth  is  the 
most  important,  in  that  it  largely  controls  all  the  other  wealth. 
The  trusts  are  in  control  of  the  transportation  facilities  of  the 
country,  they  are  practically  in  control  of  the  banking  facilities, 
and  they  control  its  main  industrial  systems.  Through  control 
of  the  banks,  the  railroads  and  the  leading  industrial  companies, 
the  directors  of  these  trusts  practically  direct  the  business  of 
the  country,  and  when  it  is  said  that  of  the  $20,000,000,000  of 
trust  capital  in  the  United  States,  upwards  of  $1,000,000,000  is 
held  by  one  family,  and  that  the  greater  amount  is  represented 
by  a  group  of  perhaps  a  dozen  capitalists,  one  gets  some  con- 
ception of  the  immense  power  which  is  wielded  in  this  country 
by  a  few  capitalists."  Certainly,  since  that  time,  the  extent  and 
control  of  trusts  has  not  diminished. 


97  MONEY   MAKING 

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other  tools,  used  in  making  the  buggy  and  in 
shaping  the  raw  materials,  are  trust  products. 
The  buggy  was  shipped  over  a  trust  railroad 
made  of  trust  rails,  on  which  run  trust  locomo- 
tives, the  wheels  of  which  are  encircled  by  trust 
tires.  The  combined  result  of  all  these  trusts 
adds  $15,  or  it  may  be  $50,  to  the  price  of  the 
wagon,  depending  upon  its  kind  and  quality, 
where  it  was  made  and  where  it  was  finally  sold. 
So  Mr.  Fairbank's  assertion  that  only  14  per 
cent,  of  goods  are  made  by  trusts  is — misleading. 
These  great  combinations  of  capital  have  been 
much  denounced.  If  there  is  one  point  on  which 
the  great  majority  of  Americans  are  agreed,  it 
is  that  trusts  should  either  be  abolished  or  so 
regulated  as  to  take  away  their  power  for  op- 
pression. State  after  State  has  enacted  laws 
against  trusts;  a  Federal  anti-trust  law  is  now 
on  the  statute  books,  and  all  political  parties 
unite  in  declaring  their  opposition  to  trusts  and 
their  methods.  President  Roosevelt  has  urged 
legislation  to  protect  the  public  against  the 
trusts.  Yet  they  flourish  and  grow  stronger; 
they  increase  in  numbers  and  in  power;  they 


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defy  or  make  use  of  the  laws  intended  for  their 
repression;  in  many  cases  they  control  State  and 
national  legislation,  so  that  no  measure  that 
would  really  injure  the  trusts  can  become  law. 
To  the  plain  citizen,  then,  the  question  arises: 
"Why,  since  public  sentiment  is  so  overwhelm- 
ingly against  trusts,  can  we  not  destroy  these 
enemies  of  the  public?" 

The  answer  is:  The  public  does  not  under- 
stand the  nature  of  trusts,  nor  wherein  lies  the 
power  of  some  combinations,  and  therefore  does 
not  know  how  to  attack  them.  Before  anything 
can  be  done,  the  people  must  think.  So  far, 
anti-trust  literature  has  consisted  mainly  of  in- 
discriminate attacks  on  trusts,  which  have  been 
assailed  as  wholly  bad  and  deserving  of  imme- 
diate destruction. 

This  is  a  mistake.  In  so  far  as  a  trust  is  a 
mere  combination  of  persons  or  corporations  pro- 
ducing or  distributing  goods,  it  is  merely  a  form 
of  partnership,  and  is  no  more  objectionable 
than  the  combination  of  persons  for  the  purpose 
of  renting  a  store  or  running  a  blacksmith's 
shop.     Nor  does  the  large  capital  of  a  trust 


99  MONEY   MAKING 

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make  it  more  dangerous  to  the  public  interests. 
That  a  dozen  or  twenty  persons  or  corporations 
should  unite  in  a  trust  is  the  same  as  that  a  dozen 
or  twenty  persons  should  unite  in  a  corporation. 
In  neither  case  is  there  any  injury  to  the  people 
merely  through  the  combination.  The  modern 
trust  grew  out  of  the  corporation  or  partnership, 
just  as  the  partnership  grew  out  of  the  industrial 
stage  in  which  the  individual  shoemaker  or 
weaver  owned  his  tools  and  was  his  own  em- 
ployer. 

The  alleged  ability  of  trusts  to  charge  higher 
prices  merely  through  their  control  of  huge  capi- 
tal has  little  foundation  in  fact.  The  great  de- 
partment stores,  with  investments  of  millions  of 
dollars  each,  not  being  protected  by  class  legis- 
lation, sell  goods  cheaper  and  at  less  rates  of 
profit  than  small  firms  doing  one-tenth  as  much 
business.  The  main  objection  to  trusts  must 
therefore  be  found  outside  of  their  large  capital 
or  large  number  of  stockholders.  Without 
the  protection  against  competition  afforded 
by  various  special  privileges,  the  trusts  would 
have  no  other  advantage  than  that  of  greater 


MONEY   MAKING  100 

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economy  and  efficiency  through  lessened 
expense  of  management  and  increased  busi- 
ness. This  advantage  would  enable  them  to 
drive  out  smaller  competitors  only  when  they 
could  supply  goods  cheaper,  that  would  mean 
that  more  people  could  buy  and  more  goods 
would  be  sold ;  which  would  increase  the  demand 
for  labor,  increase  wealth  and  greatl}^  benefit 
the  masses  who  consume  things.  If  there  were 
no  monopoly  (and  under  free  conditions  there 
could  be  none ) ,  as  soon  as  a  trust  put  up  prices 
new  competitors  would  start  up,  and  prices 
would  fall  to  near  the  cost  of  production. 

Trusts  are  able  to  extort  high  prices  when 
the  individuals  or  the  corporations  composing 
them  are  given  a  partial  or  complete  monopoly 
of  some  particular  industry.  This  is  always 
through  some  law-granted  privilege,  such  as  a 
public  franchise,  patent  right,  protection  against 
foreign  competition,  or,  most  important  of  all, 
the  right  to  hold  out  of  use  lands  from  which 
rivals  might  produce  competing  commodities. 

There  is  the  secret  of  the  trusts'  powder.  Not 
their  huge  aggregations  of  capital,  but  the  ex- 


101  MONEY   MAKING 

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elusive  privileges  given  to  some  trusts  make 
them  dangerous  and  oppressive. 

A  committee  of  the  New  York  State  Legis- 
lature, appointed  to  investigate  the  trusts,  ob- 
tained the  sworn  testimony  of  officials  of  some 
of  the  principal  tinists  doing  business  in  that 
State.  As  an  illustration  of  what  they  found, 
take  the  statements  of  the  Sugar  Trust.  These 
show  that  the  combination  of  nearly  all  the  large 
sugar  refineries  of  the  country  practically  con- 
trols the  refined  sugar  market;  that  the  cost  of 
refining  sugar  has  greatly  decreased  under  trust 
management ;  that  the  profit  on  refining  is  larger 
now  than  before  the  formation  of  the  trust,  and 
that  by  an  agreement  forced  upon  the  principal 
grocers  of  the  country  the  trust  fixes  the  price 
of  sugar  to  the  consumers.* 

As  a  result  of  this  control  of  the  sugar 
refining  industry,  the  Havemeyers  and  others 
who  organized  the  trust  have  made  immense 
fortunes,  the  annual  dividends  paid  on  trust 
stock  amounting  to  from  forty  to  sixty  per  cent. 

*  The  Report  may  be  obtained  from  the  Secretary  of  State, 
Albany,  N.  Y. 


MONEY   MAKING  102 

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on  the  real  cash  value  of  the  buildings,  plant, 
etc.,  actually  used  in  refining  sugar. 

The  Trust's  payment  of  great  sums  to  the 
National  Committees  of  both  political  parties 
in  1892,  and  to  the  RepubHcans  in  1896  and  1900 
in  order  to  secure  favors  from  Congress,  and 
the  abandonment  of  democratic  tariff  principles 
by  the  "  Sugar  Senators,"  show  that  it  is  to  the 
tariff  on  refined  sugar  that  the  Trust  looks  for 
its  control  of  the  American  market.  The  late 
Henry  O.  Havemeyer  courageously  admitted 
this  and  said  that  the  tariff  was  wrong. 

Put  sugar — raw  and  xefined — on  the  free  list, 
and  the  competition  of  British  and  German  re- 
fineries would  at  once  reduce  the  price  of  sugar, 
and  cut  down  trust  profits.  Even  though  that 
might  check  the  production  of  sugar  here,  the 
low  price  would  enormously  stimulate  the  pre- 
serving and  other  industries  that  use  sugar.  Free 
sugar  enables  the  British  to  buy  fruit  fi'om 
Spain  and  subsidized  beet  sugars  from  France 
and  Germany  in  order  to  make  marmalade  and 
jams,  and  still  to  compete  with  our  tariff -pro- 
tected goods  in  our  home  market. 


103  MONEY   MAKING 

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What  is  true  of  the  Sugar  Trust  is  true  of  all 
other  trusts  which  get  more  than  a  fair  price  for 
their  products.  The  tariff  enables  many  of 
them,  like  the  Glass  Trust,  the  Steel  Trust, 
the  Leather  Trust,  and  others,  to  raise  or  keep 
up  prices.  With  others,  such  as  the  Beef  Trust 
and  the  American  Tobacco  Company,  it  is  partly 
the  ownership  of  machines,  the  manufacture  of 
which  is  a  monopoly  under  our  patent  laws,  and 
partly  protection,  but  mainly  their  deals  with  the 
railroads  which  give  them  control  of  the  market. 
The  Coal  Trust,  the  Copper  Trust  and  the 
United  States  Steel  Corporation  depend  largely 
upon  their  ownership  of  practically  all  the  coal 
or  ore  producing  lands  for  their  power  to  crush 
out  competition  and  extort  unfair  prices.*  They 
are  aided,  however,  by  their  control  of  trans- 

*  Testimony  of  Chas.  M.  Schwab,  President  of  the  U.  S.  Steel 
Corporation,   before    Industrial    Commission,    May    11,    1901: 

"  If  I  were  valuing  the  raw  materials  in  this  capitalization  it 
would  not  be  big  enough.  This  company  has  500,000,000  tons  of 
ore  in  sight  in  the  Northwest.  We  own  something  lil^e  60,000 
acres  of  Connellsville  coal.  There  is  no  more  Connellsville  coal. 
You  could  not  buy  it  for  $60,000  an  acre. 

(This  is  probably  ten  times  its  real  value.  However,  it  is 
assessed  for  a  few  dollars  an  acre. — B.  H.) 

"  It  (ore)  is  the  greatest  asset  of  all.  Works  can  be  dupli- 
cated, but  this  ore  cannot." 


MONEY   MAKING  104 

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portation  lines,  their  advantage  in  this  case  com- 
ing through  the  grant  of  piibhc  franchises  which 
facihtate  unfair  discriminations. 

Some  trust  articles  are  no  higher  priced  be- 
cause of  the  trusts.  Some  maj^  even  be  cheaper. 
This  is  only  when  competition  has  not  been 
stifled.  In  many  cases,  however,  the  trusts  in- 
crease prices  by  25  to  100  per  cent.  The  market 
reports  show  that  steel  rails  sold  for  $24  per  ton 
in  1894,  when  the  trust  was  disorganized  and 
waiting  to  see  that  the  duty  was  not  all  taken 
off  rails.  A  duty  of  $7.84  was  left,  and  fot 
more  than  two  years  prices  were  held  firmly  at 
$28  at  Pittsburg  and  $29  at  Chicago.  With  the 
collapse  of  the  Rail  Trust  in  1897,  prices  fell  to 
$18.  In  1899  and  since  the  price  has  been  $28; 
except  1900,  when  $32  was  reached.  (See  U.  S. 
Statistical  Abstract.) 

Tacks  were  advanced  between  1890  and  1894 
from  double  to  four  times  the  old  prices.  A 
cartridge  trust  was  formed  in  1883.  Since  that 
time,  notwithstanding  improved  machinery,  the 
prices  of  cartridges  have  averaged  more  than 
[what  they  were  early  in  1883.    The  Paris  Green 


106  MONEY   MAKING 

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Trust,  just  before  the  potato  bug  season  in  1898, 
raised  prices  from  about  12  cents  to  21  cents 
per  pound.*  That  was  one  method  of  provid- 
ing work  for  the  American  farmer. 

Byron  W.  Holt,  who  was  a  witness  before  the 
Industrial  Commission  and  knows  more  about 
the  trusts  and  the  tariff  than  anyone  else,  says: 

"  A  dozen  trusts  could  be  named  that  together 
extort  at  least  $100,000,000  to  $200,000,000  a 
year  from  American  consumers.  The  profits  to 
the  Steel  Trust  through  the  tariff  were  $75,- 
000,000  in  1902.  Probably  $600,000,000  is  the 
present  profit  of  the  trusts  through  the  tariff." 

In  his  comprehensive  work,  "  The  Truth 
About  the  Trusts,"  Mr.  John  Moody  enumerates 
445  important  trusts,  embracing  8,664  subsidiary 

*  other  examples  are:  Wire  nails,  which  were  95c.  a  keg  in 
1895;  the  trust  raised  the  price  to  $2.70  in  1896,  but  importations 
and  the  lessened  demand  caused  the  price  to  drop  to  $1.60. 
After  the  Dingley  bill  was  passed  the  price  went  up,  reaching 
$3.53  in  1900,  and  has  not  gone  below  $2.00  since.  See  tables  in 
the  Iron  Age. 

The  Plate  Glass  Trust  controls  80  per  cent,  of  the  product, 
and  raised  the  price  per  square  foot  of  one  size  from  24c.  in 
1898   to   60c.   in   1900, — others   proportionately. 

Salt  was  on  the  free  list  from  1894  to  1897;  when  the  duty 
was  restored  a  trust  was  formed;  the  price  rose  from  71c.  to 
$1.17  a  barrel,  and  coarse  salt  from  $2.50  to  $4.05  a  ton.  See 
Report  of  the  Industrial  Commission. 


MONEY   MAKING  106 

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companies  or  plants,  with  a  total  capitalization, 
stocks  and  bonds  (including  those  of  controlled 
corporations),  of  over  twenty  billion  dollars.* 

Of  this  number,  however,  some  are  "  fran- 
chise"  trusts  (consolidations  of  street  railwaj^s, 
gas,  electric,  water,  and  other  public  service  cor- 
porations, whose  rake-ofF  depends  upon  the  ex- 
clusive right  to  use  the  highways)  ;  others  are 
railroad  consolidations.  Though  these  are  op- 
pressive, they  do  not  properly  come  within  the 
category  of  "  Trusts."  For  franchise  and  rail- 
way grantees  have  nearly  always  been  able  to 
fleece  the  public  before  consolidation,  whereas 
the  "  Trust "  is  usually  formed  in  order  to  begin 
a  raid. 

The  total  capitalization  of  the  "  trusts  "  in  the 
United  States,  including  railways,  street  rail- 
ways, telegraph  and  telephone  and  industrial 

Plants  Total  par 

acquired  or  value  stocks 

*  No.                       Class.                        controlled.  and  bonds. 

318     Industrial    trusts 5,288  $7,346,342,533 

111     Franchise    trusts     1,336  3,735,456,071 

6    Great   Steara    Railroad    Groups 790  9,017,086,907 

10    Allied    Railway    Systems 250  380,277,000 

8,664      $20,379,162,511 


lOr  MONEY   MAKING 

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"combines,"  has  grown  to  $35,000,000,000  now 
in  1908,  or  about  twenty- three  times  that  of  the 
Steel  Corporation.  If  the  net  earnings  are  as- 
sumed to  be  equal  per  share  to  those  of  the  Steel 
Corporation,  this  semi-social  income  equals  the 
annual  wages  of  nearly  3,000,000  workers. 

R.  M.  Hurd  states  that  the  total  capitalization 
of  the  Consolidated  Gas  Company  of  New  York 
is  about  $230,000,000,  of  which  about  $200,000,- 
000  is  "  water."*    Mr.  Hurd  holds  that  this  com- 

*  The  Joint  Committee  of  the  New  York  Legislature  reported 
(May  2,  1905),  that  the  actual  value  of  the  Consolidated  Gas 
Company's  plant  (apart  from  privileges)  was  $27,298,576.  The 
company  had  then  issued  $80,000,000  of  stock,  and  had  another 
$19,000,000  of  convertibles  outstanding.  On  the  latter  6  per 
cent,  interest  is  paid,  in  addition  to  the  dividend  of  8  per  cent. 

The  company  has  eleven  millions  invested  in  government  and 
city  bonds,  and  some  $55,000,000  in  stock  of  other  lighting  com- 
panies, on  a  large  proportion  of  which,  the  committee  says,  "  the 
company   receives  no   return   whatever." 

"  The  investment  in  these  securities  serves  the  purpose  of  so 
enlarging  the  capital  stock  as  to  disguise  in  a  lower  rate  of 
dividends  the  large  amount  of  profits  received  from  the  business 
of  making  and  selling  gas." 

As  a  result  of  this  investigation  the  legislature  passed  a  law 
reducing  the  price  of  gas  from  $1  to  80  cents.  The  enforcement 
of  the  law  was  for  a  time  enjoined  by  the  Federal  circuit  on  the 
ground  that  when  the  company  has  capitalized  its  monopoly 
power  to  charge  more  than  cost,  to  reduce  the  price  so  that  it 
cannot  continue  to  pay  dividends  on  this  capital  would  impair 
the  value  of  the   franchise  privilege  and  be  confiscation. 


MONEY  MAKING  108 

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pany  is  probably  now  able  to  pay  5  per  cent,  on 
the  "  watered  "  stock.  If  only  4  per  cent,  was 
earned  on  the  watered  stock,  the  total  annual 
amount  would  be  $8,000,000;  or  approximately 
the  equivalent  of  the  wa^es  of  18,300  workmen. 

You  are  not  used  to  those  big  figures,  per- 
haps: the  trusts  are  not  for  your  benefit.  Wall 
Street  is  used  to  them. 

In  excuse  for  this  appalling  list  its  bene- 
ficiaries will  claim  that  the  prices  of  goods  con- 
trolled by  the  trusts  have  decreased  during  late 
years.  This  book  does  not  flatter  its  readers, 
but  it  is  encouraging  to  know  that  such  argu- 
ments will  impose  upon  none  of  them  except 
those  who  are  paid  to  accept  them.  The  com- 
parison should  not  be  with  the  fall  in  prices  of 
these  goods  from  the  prices  of  twenty  or  thirty 
years  ago,  but  with  the  fall  in  prices  of  all  other 
goods. 

The  slightest  examination  shows  that  wherever 
there  have  been  reductions  in  the  prices  of  trust 
goods  they  have  been  much  less  than  those  in 
other  lines. 

It  is  evident  that  it  must  be  so ;  if  it  were  not 


109  MONEY   MAKING 

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the  trusts  would  be  failures.  The  object  and 
effect  of  a  trust  is  to  avoid  and  stifle  compe- 
tition,— it  is  clear  that  this  is  done  for  the  bene- 
fit of  the  owners  and  promoters  of  the  trust. 
They  may,  and  in  some  cases  do,  accomplish 
great  saving  in  cost  of  production,  but,  unless 
they  are  obliged  to  sell  at  lower  prices  by  compe- 
tition, which  they  have  done  away  with  as  much 
as  possible,  they  do  just  as  you  or  I  would  do, — 
get  the  highest  price  possible  and  keep  it  for 
themselves.  So  that  you  see,  you  get  very  little 
from  those  "  economies "  of  which  the  trusts 
are  so  proud,  except  indeed  greater  economies 
yourself,  so  as  to  be  able  to  pay  their  new  de- 
mands. 

The  trust  defenders  will  tell  you,  however, 
that  it  is  to  their  interest  to  reduce  prices,  so  as 
to  stimulate  demand  and  sell  more  goods.  It 
might  be,  but  that  is  not  the  way  it  works;  it  is 
less  trouble  and  safer  to  sell  a  little  at  a  big 
profit  than  much  at  a  small  profit.  Standard  oil 
costs  the  company  practically  nothing,  for  the 
by-products  of  manufacture  pay  the  cost  of  re- 
fining.   Still  the  company  sells  it  for  10  cents  a 


MONEY   MAKING  110 

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gallon  or  more.  The  New  York  gas  companies 
used  to  charge  $1.50  a  thousand  feet  and  would 
still  charge  that  had  not  the  legislature  (begin- 
ning in  1890)  reduced  the  charge  by  law  to 
$0.80.  In  spite  of  their  protests  that  this  would 
drive  them  out  of  business,  their  dividends  ad- 
vanced instead  of  decreasing — only  the  quality 
of  the  gas  decreased. 

You  think  that  men  are  entitled  to  their 
profits,  even  if  they  are  large? 

Profits  consist  of  these  six  items:  Wages,  gen- 
erally of  superintendence;  Interest;  Insurance, 
including  a  margin  against  depreciation  or  loss; 
Taxes;  and  Rent;  and  the  Extortions  of  some 
form  of  monopoly. 

As  long  as  there  are  Wages  and  Interest,  of 
course  we  cannot  object  to  paying  them  if  they 
are  fair ;  and  free  competition  would  always  keep 
them  down  to  a  fair  price. 

Insurance  must  alwaj^s  be  paid  by  someone 
under  any  conceivable  system.  So  must  taxes 
be  paid  on  something;  though  it  makes  a  lot  of 
difference  where  the  burden  is  placed. 

Rent  also,  what  land  is  worth  for  use,  seems 


Ill  MONEY   MAKING 

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a  fair  item;  the  only  question  being  whether  all 
of  it  should  be  paid  to  individuals,  or  be  taken 
by  the  community. 

But  how  about  the  exactions  of  monopoly? 
Ought  we  to  be  willing  to  pay  those  ?  Ought  we 
to  allow  men  to  be  kept  out  of  the  chance  to 
make  big  pay  and  then  to  be  mulcted  out  of 
half  of  the  pay  a  poor  man  gets,  or  out  of  a 
third  of  what  a  well-to-do  man  gets? 

At  present  there  can  be  no  question  that  the 
evils  of  trusts  greatly  outweigh  their  benefits. 
But  laws  abolishing  or  regulating  or  controlling 
trusts  are  not,  as  anti-trust  reformers  believe,  a 
remedy.  Repeal  every  form  of  privilege  and 
special  legislation,  and  thus  deprive  the  trusts 
of  the  protection  and  aid  given  them  by  foolish 
and  unjust  laws.  Then  they  would  no  longer 
desire  nor  be  able  to  force  prices  up  or  to  limit 
production,  since  if  it  were  not  for  the  restric- 
tions which  now  shut  labor  and  capital  out  of 
employment,  any  industry  in  which  the  profits 
were  large  would  be  open  to  all  who  chose  to 
compete. 

A  movement  to  take  away  the  privileges  w^hich 


MONEY   MAKING  112 

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make  some  trusts  monopolies  would  enlist  the 
support  of  all  who  are  opposed  to  special  legis- 
lation, while  not  antagonizing  those  who  believe 
in  the  rights  of  property  owners  to  manage  their 
own  business  as  they  see  fit.  In  so  far  as  the 
anti-trust  agitation  is  mixed  up  with  attacks  on 
property,  capital,  or  corporations,  it  must  fail. 

There  is  not  in  America  to-day  a  single  trust 
or  combination  which  is  oppressing  consumers 
by  extravagant  prices,  or  workers  by  reducing 
wages,  which  is  not  enabled  to  do  so  by  laws 
wilfully  or  ignorantly  passed  in  its  interest. 
This  being  the  case,  it  is  evident  that  in  so  far 
as  it  has  taken  the  form  of  repressive  or  re- 
strictive legislation,  the  fight  against  trusts  up 
to  the  present  has  been  on  wrong  lines  and  has 
therefore  failed. 

When  we  all  realize  that  the  way  to  make 
trusts  not  merely  harmless,  but  beneficial,  is  to 
repeal  class  legislation,  we  shall  have  the  help 
of  the  just  against  the  unjust,  and  we  shall  suc- 
ceed in  spite  of  their  power. 

The  exactions  of  the  trusts  are  all  due  to  our 
own  care-less-ness. 


113  MONEY  MAKING 

IN   FREE   AMERICA 

A  Sunday  school  teacher  made  each  of  the 
boys  repeat  a  verse  as  he  gave  his  contribution 
to  convert  the  Hindoos. 

Johnny  said,  dropping  his  penny :  "  The  Lord 
loveth  a  cheerful  giver." 

Jimmy:  "  The  liberal  soul  shall  be  made  fat." 

Tommy,  as  he  put  in  his  cent:  "He  that 
giveth  to  the  poor,  lendeth  to  the  Lord." 

*'  Now,  Sammy,"  the  teacher  said.  As  Sammy 
gave  up  his  penny  he  said:  "Eh,  ah — a  fool  and 
his  money  are  soon  parted." 

Sammy's  verse  was  as  true  as  the  others. 


CHAPTER  VIII 

RAILWAY  AND  FRANCHISE  MONOPOLIES 

"  The  public  be  damned ;  we  are  in  business  to  make 
money," — Wm.   H.   Vanderbilt. 

Mr.  Vanderbilt  is  dead,  but  this  spirit  still  lives. 

ONE  of  the  principal  agencies  bj^  which 
earnings  are  diverted  is  the  grant  to  privi- 
leged corporations  of  rights  in  streets  and  high- 
ways. 

First  in  importance  are  the  railroads,  to 
which  we  have  handed  over  the  exclusive  right 
to  build  and  operate  over  200,000  miles  of  rail- 
ways, running  over  routes  .taken  for  them  by 
national  and  State  governments  under  the  laws 
of  eminent  domain.  This  mileage  represents  a 
capitalized  value  of  15  thousand  million  dollars 
(nearly  three-fifths  of  the  value  of  all  the  farms 
in  the  country).  The  real  cost  of  the  railroads, 
however,  is  less  than  5  thousand  million  dollars; 
three-fifths  of  the  capitalization,  or  over  7  thou- 
sand million  dollars,  represents  watered  stock 

114 


115  MONEY    MAKING 

IN    FREE    AMERICA 

and  bonds  on  which  the  public  pay  interest  in 
exorbitant  freight  and  passenger  rates.* 

It  is  true  that  some  of  these  raih'oads  do  not 
pay  interest  on  their  nominal  capital,  but  the 
report  of  the  Interstate  Commerce  Commis- 
sion shows  that  five  per  cent,  was  paid  in  1906 
on  a  capital  of  over  twelve  billion  dollars  ($12,- 
000,000,000)  ^  or  more  than  double  the  original 
cost  of  the  roads,  an  increase  since  1902  of  three 
billion  dollars.  This  means  that  the  value  of 
franchises  given  to  railway  corporations  is  over 
seven  thousand  million  dollars,  interest  on  which 
at  five  per  cent,  amounting  to  350  million  dollars, 

*  Poor's  Manual  has  put  the  cost  of  the  railroads  at  their 
bonded  indebtedness.  But  Mr.  Van  Oss  (American  Railways 
as  Investments),  who  is  conservative,  estimated  that  the  bonds 
outstanding  in  1890  cost  the  holders  an  average  of  67  cents  on 
the  dollar. 

t  This  was  for  the  year  ending  June  30,  1906.  The  preliminary- 
report  for  1907  shows  that  net  earnings  for  that  year  were  ten 
per  cent,  greater.  The  Commission  complains  that  the  net  earn- 
ings in  its  statistics  do  not  show  the  real  net  earnings,  since 
some  railways  refuse  to  state  what  permanent  improvements  are 
charged  to  operating  expenses.     (Report  1903,  page  17.) 

The  National  City  Bank  of  New  York,  which  is  controlled  by 
Standard  Oil  interests,  says  in  a  circular  recommending  certain 
bond  investments :  "  The  construction  account  of  the  Lake  Shore 
and  Michigan  Southern  was  closed  in  1883,  since  which  time  all 
amounts  properly  chargeable  thereto  have  been  entered  against 
the  income  account  of  gross  earnings." 


MONEY   MAKING  116 

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comes  yearly  out  of  the  workers.  That  is 
eighteen  dollars  per  family,  and  eighteen  dollars 
counts  in  paying  the  expenses  of  a  household. 

The  Los  Angeles  Tivies,  the  largest  and  most 
influential  defender,  perhaps,  in  all  the  West, 
of  our  present  system  of  doing  business,  dated 
April  24,  1908,  in  a  leading  article  on  first  page, 
gives  an  acount  of  the  examination  under  oath 
before  the  New  York  grand  jury,  of  the  great 
financier,  Thomas  F.  Ryan.  These  are  some  of 
the  headings  of  the  article : 

"  Grand  Jury  Dazed  by  Ryan's  Story.  Fi- 
nancier Swears  Ninety-five  Per  Cent,  of  Rail- 
road Stocks  Cost  Nothing.  Declares  Big 
Transportation  Lines  are  Built  Entirely  with 
Bonds."  The  article  ends  with  these  startling 
disclosures : 

"Mr.  Ryan,"  said  one  of  the  grand  jurors, 
"we  understand  then  that  the  roads  only  cost 
about  5  per  cent,  of  the  capital  issue;  they  were 
built  with  bonds  ?  " 

"Built  with  bonds,"  said  Mr.  Ryan.  "The 
Union  Pacific  Railroad  is  built  with  bonds  and 
got  a  land  grant  worth  $250,000,000  besides." 


117  MONEY    MAKING 

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"Atchison  the  same?"  asked  another  grand 
juror. 

"  Atchison  the  same." 

The  consoHdation  shown  in  other  industries 
is  particularly  marked  in  railways.  The  great 
trunk  systems  have  in  recent  years  been  concen- 
trated under  the  management  of  a  few  finan- 
cial interests.  Roads  which  were  wrecked  for 
the  profit  of  those  who  floated  them  have  been 
re-organized  by  J.  Pierpont  Morgan  and  his 
associates,  until  now  the  Morgan  group  alone 
controls  roads  with  a  capitalization  of  over  two 
billion  dollars,  whilst  six  groups  of  financiers  in- 
creased the  mileage  they  control  from  61,833  in 
1897  to  164,586  in  1904,  embracing  over  a 
thousand  subsidiary  companies,  with  a  total  capi- 
talization of  over  nine  billion  dollars.* 

*Mr.  John  Moody,  in  "The  Truth  About  the  Trusts,"   gives 
the  following  details  of  railroad  consolidation: 

Capitalization,  Mil'ge. 

Vanderbilt  Group    (New  York   Central) .  .$1,169,196,132  21,888 

Pennsylvania    Railroad    Group 1,822,402,235  19,300 

Morgan    Group 2,265,116,350  47,206 

Gould-Rockefeller    Group 1,368,877,540  28,157 

Harriman-Kuhn-Loeb     Group 1,321,243,711  22,943 

Moore  Group  (Rock  Island  Company) 1,070,250,939  25,092 

— I ■ . 

$9,017,016,907     164,586 


MONEY   MAKING  il8 

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This  tendency  of  railroad  systems  to  pass  into 
the  control  of  a  few  capitalists  is  shown  by  the 
history  of  the  Northern  Securities  Company, 
which  was  formed  with  a  capital  of  $394,000,000 
as  a  "  holding  company,"  to  hold  the  securities 
of  the  Great  Northern  and  of  the  Northern 
Pacific  Railways,  thereby  placing  these  two  sys- 
tems with  over  11,000  miles  of  road  under  one 
control,  in  order  to  totally  prevent  competition 
in  the  vast  area  which  they  drain.  Although 
the  Securities  Company  has  been  declared  illegal 
by  the  Supreme  Court  of  the  United  States,  as 
a  monopoly  in  restraint  of  trade,  the  same  stock- 
holders still  control  both  the  Great  Northern 
and  Northern  Pacific  roads.  These  roads  are 
still  run  to  make  the  most  money  for  the  di- 
rectors or  stockholders,  without  regard  to  public 
interest;  in  other  words,  freight  and  passenger 

The  independent  mileage  is  about  26,000,  with  a  capitalization 
of  $2,600,000,000.  This  mileage  consists  mainly  of  short  lines, 
or  "  feeders  "  dependent  on  the  large  systems.  The  balance  of 
13,000  miles  is  dominated  by  the  large  groups.  "  These  groups 
themselves  are,  in  many  important  ways,  linked  one  to  the 
other.  .  .  .  The  steam  railroads  of  the  country  really  make 
up  a  mammoth  transportation  trust  whicli  is  dominated  by  a 
handful   of  far-seeing  and  masterful  financiers." 


119  MONEY   MAKING 

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charges  are  still  "  all  that  the  traffic  will  bear." 
This  shows  the  weakness  of  laws  such  as  the 
Sherman  Anti-Trust  Act. 

Besides  the  franchises,  the  railroads  have  re- 
ceived enormous  gifts  from  the  public.  In  many 
cases  the  cost  of  the  right-of-way  has  been  paid 
by  the  municipality  through  which  the  road  runs. 
Subsidies  have  been  granted  by  our  towns,  cities, 
counties,  States  and  by  the  nation,  in  most  cases 
sufficient  to  construct  the  road  under  honest 
management.  Huge  areas  of  rich  land  have  also 
been  granted,  as  detailed  in  Chapter  VI.  In 
some  instances  more  than  the  cost  of  the  road 
has  been  realized  from  sales  of  such  land. 

In  return  for  these  lavish  gifts  what  have  we 
got?  Freight  and  passenger  rates  fixed  as  high 
as  can  be  made  to  pay,  to  make  a  profit  on  capital 
that  was  never  invested !  The  record  of  railroad 
management  in  America  shows  a  total  disregard 
of  the  people's  interests,  and  a  desire  for  all  the 
money  that  can  be  wrung  from  those  who  are 
compelled  to  patronize  the  roads.  To  this  end 
the  stocks  are  recklessly  and  often  illegally 
watered,  legislatures  are  wheedled  or  corrupted 


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by  lobbyists,  of  the  Chauncey  M.  Depew  type, 
and  every  attempt  at  legitimate  competition  is 
crushed  out,  when  possible,  by  any  means  in  the 
power  of  the  railway  kings.  The  result  is  that 
to-day  the  railroads  largely  control  the  State 
legislatures  and  the  Congress,  while  there  is  no 
department  of  public  life  in  Avhich  the  influence 
of  their  adroit  attorneys  and  agents  is  not  felt. 

The  principal  complaint  against  railroad  cor- 
porations is  that,  having  been  created  by  law  for 
the  public  benefit,  they  carry  on  business  only 
to  enrich  themselves  at  the  public  expense.  The 
essential  difference  between  a  railroad  and  a 
private  industry  is  that  without  the  express  au- 
thority of  government,  the  railroad  could  not 
be  built.  That  a  corporation  is  empowered  to 
t^ke  possession  of  a  certain  strip  of  land  for  a 
roadbed  is  what  enables  it  to  do  business.  This 
right  of  eminent  domain  makes  a  railway  a  semi- 
public  business,  rightly  subject  to  public  regu- 
lation and  control. 

^  But  the  direct  loss  to  the  people  by  railwaj'' 
overcharges  is  small  com])ared  to  the  indirect 
loss  that  the  nation  sufl'ers  because  high  rates, 


121  MONEY   MAKING 

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by  preventing  the  roads  from  being  used  to  their 
full  capacity  and  by  increasing  the  cost  of  goods 
to  the  consumer,  curtail  manufacturing  and  di- 
minish the  national  wealth. 

In  addition  to  their  exaction  of  rates  far 
higher  than  legitimate  expenses  and  fair  profits 
would  justify,  is  the  discrimination  between 
localities  and  individuals.  The  smaller  towns 
and  country  districts  have  especially  suffered 
from  this  cause,  the  railways  secretly  making 
concessions  to  favored  persons  or  corpoi'ations, 
often  in  return  for  payments  to  officials.  In 
this  way  the  great  Standard  Oil  Trust  w^as  built 
up,  and  its  strength  still  lies  mainly  in  its  pipe 
lines  and  its  influence  with  certain  railways  which 
carry  its  products  at  rates  much  lower  than  those 
charged  its  competitors.  This  is  done  by  mak- 
ing the  low  rate  subject  to  some  condition — 
n:uleage,  route,  etc. — with  which  only  the  Stand- 
ard Oil  Company  can  comply.* 

This  "railroad  problem"  has  for  many  years 

*  For  full  particulars  as  to  the  extent  and  evils  of  railway 
monopolies  see  "  Wealth  Against  Commonwealth,"  by  Henry  D. 
Lloyd ;  "  Railways  and  the  Republic,"  by  J.  F.  Hudson ;  and 
"  The  Railroad  Question,"  by  ex-Governor  Larrabee  of  Iowa. 


MONEY   MAKING  123 

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been  much  discussed,  particularly  among  the 
farmers.  Manufacturers  and  merchants  have 
complained  of  high  freight  charges  and  unjust 
discriminations,  but  they  have  not  as  a  class 
taken  an  active  part  in  movements  to  correct 
the  abuses.  This  is  because  the  rates  charged 
for  transporting  goods  are  always  added  to  the 
price  which  the  consumers  must  psLj  for  their 
necessities.  And  since  the  manufacturers  and 
merchants  do  not  really  lose  the  excessive  charges 
that  they  pay  out,  they  have  not  used  their  great 
influence  against  railroad  extortion. 

Attempts  have  been  made  to  remedy  these 
abuses  by  laws  against  combinations  to  increase 
rates ;  by  State  commissions,  and  by  creating  the 
national  Interstate  Commerce  Commission,  to 
establish  fair  rates.  But  while  a  little  has  been 
accomplished  in  this  way,  the  roads  have  gone 
on  practically  as  before,  ignoring  the  laws  pr 
openly  violating  them  by  Trunk  Line  Pools  and 
General  Managers'  Associations.  Thus  in  spite 
of  anti-pooling  laws,  the  Joint  Traffic  Associa- 
tion was  organized  in  1895,  a  gigantic  trust  com- 
posed of  the  representatives  of  twenty  or  more 


123  MONEY   MAKING 

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railroad  systems,  having  altogether  a  capital  of 
nearly  two  thousand  million  dollars,  for  the  pur- 
pose of  preventing  rate  competition  on  the  trunk 
lines  running  from  the  Mississippi  Valley  to  the 
Atlantic.  This  combination  was  declared  illegal 
by  the  United  States  Supreme  Court  in  1898,  as 
was  the  Trans-Missouri  agreement. 

What  was  the  result?  Hon.  Charles  A, 
Prouty,  of  the  Interstate  Commerce  Commis- 
sion, tells  us  in  the  North  American  Review  of 
June,  1904: 

"  The  opinion  in  the  Joint  Traffic  case  was  promulgated 
on  October  24,  1898,  and  no  corresponding  period  in 
recent  years  has  seen  fewer  destructive  rate  wars  than 
the  one  sirrce  then.  Instead  of  railway  disaster,  there  has 
been  a  continuous  era  of  increasing  railroad  prosperity. 
Rates  have  not  declined;  upon  the  contrary,  they  began 
to  advance  soon  after  this  decision,  and  they  have  been 
steadily  advancing  ever  since.  What  is  more  to  the  pur- 
pose, the  thing  which  this  interpretation  of  the  law  was 
supposed  to  prohibit  has,  in  fact,  existed  all  along.  The 
Trans-Missouri  and  the  Joint  Traffic  Associations  have 
ceased ;  the  word  '  agreement '  has  been  stricken  from  the 
articles  of  confederation  between  railways;  in  theory, 
each  carrier  acts  independently  of  all  others,  but  in  prac- 
tice there  has  been  no  considerable  time,  in  any  portion 
of  our  country,  since  the  rendition  of  these  decisions  when 


MONEY   MAKING  124 

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competitive  rates  have  not  been,  in  fact,  the  subject  of 
concerted  action.  Within  the  last  five  years,  rates  upon 
every  important  commodity  in  every  section  have  been  ad- 
vanced.    .     .     . 

"  The  Auditor  of  the  Interstate  Commerce  Commission, 
in  reply  to  a  resolution  of  the  Senate  asking  for  infor- 
mation, has  estimated  that  advances  in  railway  rates  made 
during  the  last  four  years  would,  if  applied  to  the  move- 
ment of  traffic  for  the  year  ending  June  30,  1903, 
amount  to  $155,000,000.  This  enormous  tax  represents, 
in  most  instances,  an  arbitrary  tax  laid,  as  in  the  case  of 
the  lumber  rate,  by  the  railways  upon  the  public.     .     .     ." 

We  are  abolishing  the  old  toll  roads,  but  we 
give  charters  to  new  ones  that  charge  us  a  great 
deal  more. 

]\Iuch  was  expected  of  the  Interstate  Com- 
merce Commission  at  the  time  of  its  creation, 
but  its  powers  have  been  restricted  by  decisions 
of  the  courts.     The  real  remedy  lies  elsewhere. 

This  remedy  can  be  stated  in  a  few  words. 
For  the  present,  First:  allow  as  much  compe- 
tition as  possible  by  repealing  the  laws  which 
empower  railway  commissions  to  forbid  the 
building  of  new  roads,  and  grant  franchises  on 
proper  terms  for  as  many  roads  as  men  see  fit 
to  construct.     Second:  let  the  courts  and  legis- 


125  MONEY   MAKING 

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latures  insist  on  the  railroad  corporations  con- 
fining themselves  strictly  to  the  functions  for 
which  they  were  created.  This  would  involve 
making  directors  criminally  responsible  for 
criminal  violations  of  law.  Third:  tax  all  rail- 
way franchises  on  their  full  value,  thus  taking 
for  the  use  of  the  whole  people  the  peculiar 
values  given  to  the  railroads  by  the  increase  of 
population,  by  special  location  of  roads,  or  other 
causes  not  due  to  the  owners  of  the  roads. 
These  franchise  values  may  best  be  ascertained 
by  adding  together  the  market  value  of  the 
stock,  bonds  and  floating  debt,  and  deducting 
from  this  aggregate  sum  the  value  of  the  im- 
provements to  the  real  estate  and  the  value  of 
the  rolling  stock. 

The  values  may  be  arrived  at  by  a  uniform 
system  of  accounting  and  comparison  of  gross 
and  net  earnings. 

But  before  we  can  solve  the  problem,  legis- 
lation will  be  necessary  to  re-establish  the  vital 
principle  that  the  railways  are  really  public 
highways,  the  use  of  which  is  given  to  corpo- 
rations for  specific  purposes;  but  this  will  not 


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necessitate  public  operation  of  the  roads.  With 
the  enormous  increase  in  the  available  capital  of 
the  country  which  will  come  with  the  freeing  of 
natural  resources  now  held  out  of  use,  it  will  be 
easy  to  build  as  many  new  railroads  as  may  be 
needful,  and  steamships  also  will  be  built  in 
plenty. 

Even  now  a  project  is  mooted  under  the  guid- 
ance of  former  Congressman  William  J.  Coombs 
of  Brooklyn,  for  the  government  to  build  a 
trans-continental  railway  upon  which  anyone 
can  run  trains,  to  make  it  in  fact  a  railed  high- 
way. This  would  enable  short  railways  to  com- 
pete with  the  great  trunk  lines,  because  they 
could  tap  this  government  road  and  so  get  their 
share  of  through  traffic. 

This  plan  is  a  step  in  the  right  direction,  and 
would  soon  be  followed  by  other  national  and 
State-owned  railed  ways,  with  which  connections 
could  be  made  by  independent  lines. 

Next  in  importance  are  the  street  railways, 
capitalized  in  1906  at  $3,700,000,000,*  but  which 

*  statistical  Abstract  of  United  States.  Tables  published  by 
Graham  &  Co.,  Philadelphia  bankers,  show  that  in  1902  out  of 
987  electric  traction  companies  capitalized  at  $2,300,000,000,  the 


127  MONEY   MAKING 

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could  undoubtedly  be  reproduced  for  a  quarter 
of  this  capitalization,  or  eight  to  ten  hundred 
millions.* 

Our  representatives  have  given  away,  in  most 
cases  without  any  return,  the  use  of  streets 
which  were  constructed  at  great  cost  for  public 
use.  And  now,  to  pay  dividends  on  the  watered 
stock  of  the  corporations,  the  working  people, 
who  pay  most  car  fares,  are  charged  double  the 
fare  for  which  they  could  be  carried  at  a  profit. 
The  average  worker's  family  in  cities  and  towns 
where  there  are  street  cars,  spends  about  sixty 
dollars  per  year  in  car  fares.  Here  is  thirty  dol- 
lars which  ought  to  go  for  better  food,  clothes, 
etc.,  diverted.^ 

net  income  of  799  companies,  after  deducting  $13,000,000  taxes, 
was  $95,000,000.    This  is  five  per  cent,  on  $1,900,000,000. 

*  Since  1901  a  new  operating  company  (formerly  Interurban, 
now  New  York  City  Street  Railway  Co.)  has  been  formed,  which 
contrls  the  New  York  City  steel  railroad  systems,  and  its 
stock  is  held  by  another  corporation,  the  Metropolitan  Securi- 
ties Co.,  thus  adding  more  paper  values.  The  whole  thing  natur- 
ally went  into  the  hands  of  receivers  in  the  first  hard  times. 

t  For  details  as  to  original  cost  of  lines  and  the  methor  by 
which  excessive  profits  are  concealed  through  leases  and  new 
companies,  see  "  The  Street  Railway  System  of  Philadelphia," 
by  Professor  Speirs,  published  by  Johns  Hopkins  University,  of 
Baltimore.     Just  after  writing  this  Prof.  Speirs  "  resigned "  his 


MONEY   MAKING  138 

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Most  persons  appear  to  think  this  is  all  right ; 
for  they  call  the  conductor  to  take  their  fares 
when  he  overlooks  them.  The  passengers  do  not 
do  that  to  a  Wild- West  road  agent  when  he  over- 
looks a  victim. 

Millions  have  been  made  out  of  street  rail- 
ways, but  their  overcharges  have  not  the  same 
power  as  those  of  steam  railroads  to  limit  pro- 
duction of  wealth. 

Because  these  monopolies  are  local  in  their 
nature  their  owners  have  not  yet  been  able  to 
form  national  combinations  nor  to  influence  gen- 
eral legislation  as  extensively  as  steam  railroads. 

Next  come  gas  and  electric  lighting  fran- 
chises. In  nearly  every  city  and  town  these 
valuable  privileges  to  lay  pipes  and  string  wires 
under  or  in  the  public  streets  have  been  given 
away  or  sold  for  a  trifle.  In  every  case  where 
this  has  been  done  those  who  use  gas  or  electricity 
are  compelled  to  pay,  over  and  above  the  fair 

chair  in  the  Drexel  Institute.  Some  lines  are  paying  dividends 
and  rentals  to  four  overlying  companies — and  the  original  share- 
holders paid  less  than  half  of  par  value  for  the  stock.  While 
it  is  true  that  the  most  excessive  "  watering "  is  in  large  cities, 
it  is  also  true  that  most  of  the  street  railway  capitalization  is 
in  these  cities,  and  that  the  dividends  are  paid  from  their  people. 


129  MONEY   MAKING 

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cost  of  the  service,  a  price  based  on  the  value 
of  the  franchise.  The  total  value  of  the  gas  and 
electric  light  plants  of  the  country,  as  estimated 
by  their  owners,  is  over  $1,200,000,000.  To  re- 
produce these  plants  would  not  cost  over  $500,- 
000,000.  The  people  of  our  cities  and  towns  are 
paying  at  least  thirty  million  dollars  annually 
to  these  private  corporations  because  the  latter 
have  the  exclusive  use  of  the  public  highways. 
Wouldn't  it  be  just  as  well  if  the  people  kept 
that  thirty  million  dollars  a  year  themselves? 

Other  franchises  are  those  of  the  telegraph 
and  telephone  corporations;  in  some  cities  water 
companies,  ferry  and  bridge  companies,  and  a 
number  of  minor  corporations  of  various  kinds 
which  depend  for  their  existence  on  the  use  of 
the  public  highways  or  on  some  special  privilege. 
All  these  have  one  feature  in  common;  they  are 
protected  against  free  competition  by  laws, 
often  passed  in  their  interests.  They  are  to  a 
large  extent  parasites  on  the  wealth-producers, 
taking  property  they  do  not  earn.* 

*  See  Professor  Richard  T.  Ely's  book,  "  Problems  of  To-day," 
for   detailed   information   regarding   franchise   monopolies. 


MONEY    MAKING  130 

IN    FREE    AMERICA 

Do  not  imagine  that  j^ou  pay  none  of  this 
excess  profit  because  you  send  few  telegrams 
or  ship  little  freight  or  use  no  electric  light. 
These  are  largely  used  as  tools  of  commerce — 
when  so  used  they  are  as  much  part  of  the  ma- 
chinery of  production  as  looms  and  furnaces — 
and  their  cost  to  merchants  and  manufacturers 
is  finally  paid  by  the  consumers  of  products. 

We  could  better  afford  to  pension  oiF  all  the 
stockholders  than  to  submit  to  the  restraints 
and  exactions  of  these  new  kinds  of  road  agents. 
But  it  is  our  own  fault :  "  He  who  stands  for  a 
kick  deserves  it;  and  he  who  rests  in  a  prison 
needs  it." 

We  have  calculated  the  direct  railroad  exac- 
tions as  shown  by  dividends  on  inflated  capital 
at  $18  per  worker's  family,  and  those  of  street 
car  lines  at  $30  to  each  family  that  uses  them. 
Even  if  we  estimate  the  extortions  of  electric 
lighting,  gas,  water,  bridge,  telegraph  and  tele- 
phone companies  at  only  as  much  more,  that 
makes  $96  per  year,  or  $960  and  interest  per 
family  for  the  last  ten  years — say  $1,250  with- 
out compounding  the  interest. 


131  MONEY   MAKING 

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It  might  be  handy  to  have  that  sum  in  the 
bank  just  now. 

How  to  do  away  with  excessive  charges  by 
all  these  corporations,  and  to  secure  for  the  peo- 
ple the  best  and  cheapest  service  from  street 
railway,  gas,  electric  light  and  all  other  fran- 
chise-holding companies,  and  at  the  same  time 
to  obtain  for  public  purposes  the  full  value  of 
the  franchises  granted  by  the  community,  is  a 
question  to  which  widely  different  answers  are 
given. 

Apart  from  the  socialists,  who  urge  govern- 
ment ownership  of  all  productive  industries, 
many  persons  think  that  the  municipalities 
should  own  and  operate  all  industries  which  re- 
quire public  franchises.  Others  advocate  public 
ownership  of  the  franchises  only,  which  might  be 
leased  for  short  periods  to  the  highest  bidders 
who  will  undertake  to  operate  them  on  terms 
fixed  by  the  people.  A  third  proposition  is  that, 
since  nearly  all  the  valuable  franchises  in  the 
cities  and  towns  have  already  been  given  away 
outright  or  sold  for  trifling  sums,  the  best 
method  of  asserting  the  public  ownership  of 


MONEY   MAKING  132 

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franchises  is  by  taking  back  in  taxes  the  full 
value  made  by  the  coininunit5\ 

This  is  the  most  practicable  way  to  reclaim  the 
people's  rights,  if  at  the  same  time  the  principle 
is  maintained  that  as  all  corporations  enjoying 
special  privileges  are  merely  creatures  of  the 
public,  their  charges  may  properly  be  regulated 
by  the  public.  Here,  again,  it  must  be  remem- 
bered that,  with  no  trade  restrictions  and  with 
free  land,  and  unfettered  monej^  and  transpor- 
tation, it  will  be  much  simpler  and  easier  to  deal 
with  the  minor  difficulties.  In  any  case  the  im- 
portant thing  to  do  now  is  to  arouse  public  senti- 
ment against  the  folly  of  making  franchise 
holders  rich  at  the  expense  of  workers. 


CHAPTER   IX 

HOW    IT    HURTS    YOU 

XT'  OTJ  are  a  thinking  man  or  woman.  If  you 
-*■  were  not,  you  would  not  be  reading  such 
a  book  as  this,  for  this  book  does  not  try  to 
amuse  you,  but  only  to  put  in  plain  words  what 
you  have  often  thought  and  what  you  cannot 
help  thinking.  You  are  no  pauper,  nor  drunk- 
ard, nor  idler,  nor  spendthrift,  nor  ignoramus; 
such  people  do  not  read  economic  books.  You 
are  an  American,  or  one  of  the  energetic  men 
or  women  who  have  left  their  homes  to  seek  new 
opportunities  in  this  country.  This  energy  and 
enterprise  and  capacity  has  picked  you  or  your 
parents  out  from  the  rank  and  file  of  average 
men  who  are  content  to  stay  at  home  and  suffer 
as  their  fathers  did.  You  work  hard  to  support 
your  family  or  to  get  on  in  life.  Why  are  you 
not  rich?    Will  you  ever  be  rich? 

You  are  entitled,  not  only  to  good  pay,  but  to 
reasonable  wealth.  Others  not  so  smart  nor  so 
economical  nor  so  industrious    have  money  to 

133 


MONEY   MAKING  134 

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burn,  and  do  burn  it,  but  you  have  little  even  to 
save.  If  you  can  think  of  any  mistake  you  have 
made  or  anything  that  you  do  which  has  pre- 
vented you  from  making  more  money,  you  can 
think  also  of  a  dozen  men,  and  women,  too,  who 
have  got  rich  in  spite  of  the  same  things  or  of 
a  great  deal  worse  things.     Why  is  that? 

Is  not  the  answer  plain?  The  opportunities 
for  productive  work,  the  resources  of  nature 
have  been  absorbed.  You  cannot  get  pay 
enough  or  make  profit  enough  to  enable  you  to 
get  a  foothold.  The  big  fellows  get  a  monopoly 
ahead  of  you  every  time.  They  have  secured 
the  sugar  lands,  the  grazing  lands,  the  timber 
lands,  the  building  sites,  the  coal  seams,  the  iron 
ore  lands,  the  quarries,  the  street  car  franchises, 
the  patents,  the  banking  charters. 

The}'-  were  here  before  j^ou,  or  thc}^  had  in- 
fluential fathers  or  rich  connections  or  risked 
all  the}''  had,  perhaps  character  and  freedom, 
on  a  big  gamble,  or  they  got  "  in  "  with  some 
kind  of  corporation,  got  in  often  by  extremely 
crooked  ways.  You  work  and  contribute  your 
share  to  their  profits. 


135  MONEY   MAKING 

IN    FREE    AMERICA 

You  will  read  in  newspapers  and  in  books  and 
hear  from  the  pulpits  that  they  were  more  in- 
dustrious and  enterprising  and  frugal  and  that 
you  might  be  as  they  are:  that  it  is  all  "  the  sur- 
vival of  the  fittest! "  They  say,  "  There  is  plenty 
of  room  at  the  top."  Nonsense!  There  is  room 
for  a  few  on  top  of  you  and  the  few  monopolists 
are  quite  willing  to  pay  editors,  by  advertise- 
ments and  in  other  ways,  and  to  support  men  to 
flatter  them  by  teaching  that  we  should  all  be 
contented  with  that  arrangement. 

You  know  how  hard  it  is  to  find  places  for 
even  the  brightest  young  men.  You  are  not  the 
only  one  who  finds  this  hard.  The  wealthy  do 
not  know  to-day  what  to  do  with  their  boys. 
There  are  no  "openings,"  they  say. 

Henry  George,  Jr.,  says  in  "  The  Menace  of 
Privilege  " :  "  Conversing  recently  with  a  large 
cattle  raiser  in  the  '  Panhandle '  of  Texas  I 
learned  that  the  rate  of  wages  was  about  '$25 
and  found,'  that  this  had  been  the  rate  of  wages 
for  some  years,  but  that,  whereas  only  Mexican 
greasers  could  years  ago  be  had,  now  a  lot  of 
bright  young  Eastern  men,  some  of  them  col- 


MONEY   MAKING  136 

IN   FREE   AMERICA 

lege  bred,  were  coming  into  the  country  and 
were  glad  to  get  emploj^ment  on  those  terms." 

The  law,  medicine,  architecture,  business, 
everything  is  "  overcrowded."  Overcrowded 
with  well-educated,  up-to-date  young  men  who 
are  glad  to  work  for  less  than  they  can  live  upon. 
Do  not  these  young  men  produce  enough  or 
give  service  enough  to  pay  their  board?  Of 
course  they  do;  they  produce  many  times  that 
much.  Who  gets  it?  They  get  it  who  control 
the  opportunities  to  work.  Anj^one  will  feed  a 
horse  and  pay  hire  for  him  besides.  Is  it  possible 
that  a  young  man's  work  is  worth  less  than  a 
horse's?  Yet  he  gets  (if  he  is  in  luck)  just  what 
the  horse  gets,  board  and  shelter  for  his  work. 
Somebody  else  makes  profits  out  of  him.  Some- 
one asked  a  telegraph  boy  what  he  earned.  He 
said:  "I  earn  about  forty  dollars  a  week." 
"What?"  cried  the  investigator.  "Yes,"  said 
the  boy,  "  I  earn  about  forty  dollars  a  week  for 
the  company — but  I  get  only  four." 

Says  Charles  IT.  Turner,  the  ice-cart  driver 
whom  the  people  of  New  York  sent  to  Congress : 
"It  is  to  be  remembered  that  the  producing 


137  MONEY   MAKING 

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power  of  the  wage-earner  has  steadily  increased, 
so  that  the  laborer  to-day  is  producing  much 
more  cloth,  or  manufactured  iron,  or  wheat,  or 
cotton,  in  a  year  for  the  same  or  less  money. 
Thus  the  labor  cost  of  all  articles  has  been  re- 
duced, and  if,  as  I  believe,  the  true  measure  of 
wages  is  the  amount  of  production  and  not  the 
time  employed,  it  is  plain  that  wages  must  have 
fallen." 

The  productive  power  of  the  workers  has  been 
increased  at  least  tenfold  per  capita  during  the 
last  fifty  years.  Do  the  men  who  make  things 
get  ten  times  as  much  wages? 

Of  course  they  don't.  Even  the  census  ad- 
mits (vol.  vii.,  p.  xvii.)  that  "in  comparison  with 
the  figures  of  the  census  of  1850,  the  statistics 
of  manufactures  in  1900  show  an  increase  in 
capital  invested  approximating  seventeenf old ; 
in  the  average  number  of  wage-earners  the  in- 
crease w^as  about  four  and  one-half  fold;  in 
amount  of  wages  paid  about  ninefold;  and  in 
gross  value  of  products  about  twelvefold." 

How  many  fold  have  your  wages  increased? 

Wages  are  high  when  there  are  more  jobs 


MONEY    MAKING  138 

IN    FREE    AMERICA 

than  hands;  and  wages  are  low  when  two  men 
compete  for  every  place.  Rents  rise  when  there 
are  more  tenants  than  tenements  and  fall  when 
the  landlords  must  seek  for  every  tenant. 

A  war  decreases,  for  the  moment,  the  com- 
petition for  places  to  live,  and  creates  a  demand 
for  men.  To  burn  a  city  diminishes  wealth,  but 
it  increases  the  amount  that  the  laborer  at  that 
spot  gets  of  what  he  produces,  because  more 
labor  is  demanded  to  build  the  city  up  again. 
It  often  brings  land  into  use  that  was  un- 
used or  only  partly  used  before,  and  so  far  gives 
the  producer  a  better  chance. 

You  are  victimized  on  the  one  hand  and  on  the 
other,  whether  you  are  merchant,  lawyer,  doctor, 
or  clerk,  or  mechanic,  you  are  taxed  out  of  what 
you  do  make  and  deprived  of  the  chance  to  make 
what  your  services  are  worth.  If  you  had  not 
been  you  might  have  been  well  off  already.  If 
you  will  stop  the  process  even  now,  so  that  the 
full  amount  you  produce  will  belong  to  your- 
self, you  may  be  rich  in  a  few  years. 


CHAPTER   X 

TO    BUSINESS    MEN 

"  To  levy  a  tax  of  7  per  cent,  is  a  dangerous  experiment 
in  a  free  country,  and  may  excite  revolt;  but  there  is  a 
method  by  which  you  can  tax  the  last  rag  from  the  back 
and  the  last  bite  from  the  mouth  without  causing  a  mur- 
mur against  high  taxes:  and  that  is  to  tax  a  great  many 
articles  of  daily  use  and  necessity  so  indirectly  that  the 
people  will  pay  them  and  not  know  it.  Their  grumbling 
then  will  be  of  hard  times,  but  they  will  not  know  that 
the  hard  times  are  caused  by  taxation." — William  Pitt  in 
a  speech  in  the  British  Parliament. 

YOU  are  a  merchant,  or  an  agent,  or  a 
builder,  or  perhaps  you  are  a  manufac- 
turer or  manager.  You  wonder  why  business  is 
bad.  Is  it  not  people  that  you  sell  to?  Do  not 
you  suffer  as  much  as  they  if  they  have  not 
money  with  which  to  buy;  if  their  opportunities 
of  production  are  checked  and  restricted;  if 
those  industries  are  kept  idle  by  which  they 
should  be  making  money  to  spend  with  you? 
When  people  are  poor  they  cannot  huy,  they 
cannot  satisfy  their  wants  with  your  goods. 
They  cannot  pay  their  bills  for  which  you  must 

139 


MONEY   MAKING  140 

IN    FREE    AMERICA 

trust  them.  Is  not  that  the  secret  of  a  world- 
wide "  glutted  "  market  in  high  tariff  and  in  free 
trade  countries,  in  silver  standard  and  "  sound 
money  "  countries,  in  places  where  there  are  rail- 
roads and  where  there  are  none,  whether  immi- 
gration is  restricted  or  whether  it  is  free?  Everj'^- 
where  except  in  new  countries  where  land  is 
cheap  and  open.  Is  not  this  the  real  explanation 
of  "  over-production "  which  seems  so  strange 
when  we  look  out  of  the  window  and  see  men  and 
women  workers,  ill-clothed,  ill-fed,  and  lacking 
the  necessaries  of  life,  passing  by  over-stocks  of 
unsold  goods? 

Recurrently  "  business  is  dull."  "  Trade  is 
poor."  ]Must  we  seek  the  cause  now  in  one,  now 
in  another,  accidental  circumstance?  At  one 
time  in  European  distrust  of  our  securities,  then 
in  poor  crops  here,  again  in  good  crops  in 
Europe,  or  in  "tight  money?"  Are  our  inter- 
ests really  identical  with  those  of  a  lot  of  stock 
gamblers,  so  that  everything  that  helps  us  ought 
to  make  a  boom  for  those  who  produce  nothing, 
who  hardly  even  facilitate  any  trade  that  makes 
others  richer?     May  it  not  even  be  that  what 


141  MONEY    MAKING 

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makes  good  times  for  the  monopolist  and  the 
stock  broker  makes  hard  times  for  others? 

You  manufacture  or  you  sell  manufactured 
goods.  To  every  piece  of  goods  that  goes  out 
of  your  place  there  is  a  big  addition  in  the  price, 
an  addition  which  you  do  not  get. 

The  raw  materials  were  taxed,  the  machinery 
was  taxed,  the  buildings  in  which  they  were 
made  were  taxed,  the  permission  to  do  business 
was  taxed  as  license  tax,  the  capital  employed 
by  the  company  that  made  them  was  taxed ;  and 
everyone  who  paid  that  tax  (you  know)  added 
it  to  his  "  cost "  of  goods  and  put  a  profit  on 
that  whole  price. 

The  tax  of  ten  per  cent,  on  notes  of  State 
banks  has  made  it  impossible,  because  unprofit- 
able, to  issue  those  notes.  A  tax  of  three  per 
cent,  would  do  the  same.  Taxation  of  every- 
thing, even  of  dogs,  lessens  their  number. 

There  is  a  tax  on  cigars  which  makes  cigars 
dear — decreases  the  consumption  and  discour- 
ages their  production.  Just  so  your  own  pro- 
duction and  your  customer's  consumption  are 
lessened  and  discouraged. 


MONEY   MAKING  148 

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Your  business  is  growing,  perhaps;  for  you 
are  shrewd  and  energetic — ^''ou  have  made  yours 
a  good  business  stand;  perhaps  you  own  it — 
Hkely  not.  You  would  Hke  to  extend  a  little,  to 
get  the  next  store,  or  more  factory  room.  When 
you  came  there  it  was  a  very  poor  block  and  your 
rent  was  not  very  high.  Now  you  want  to  use 
the  next  lot — but  the  rent  has  advanced.  You 
wish  to  employ  more  clerks  and  to  sell  more 
goods  and  so  to  sell  them  cheaper;  but  that  in- 
creased rent  or  the  price  of  the  lot  stands  in  the 
way — it  costs  too  much.  So  j^ou  go  on  as  j^ou 
were.  You  are  restricted;  your  customers  can- 
not get  so  many  goods  for  their  money;  you 
must  do  a  smaller  business  and  give  fewer  per- 
sons a  chance  to  earn  something,  they  in  turn 
have  less  to  spend  and  "trade  is  dull."  Is  not 
the  connection  clear? 

Perha])s  you  think  that  because  you  get  some 
of  your  income  from  rents,  you  are  one  of  the 
"land-owning  class."  Nonsense.  For,  if  you 
will  consider,  most  of  yoiu*  "  rents  "  are  the  hire 
of  buildings,  not  the  rent  of  land.  But  suppose 
they  were  not,  does  that  rent  repay  the  fancy 


143  MONEY   MAKING 

IN    FREE    AMERICA 

price  you  pay  for  coal,  for  oil,  for  raw  material, 
for  iron  and  glass,  and  all  other  goods,  for  high 
gas  bills,  railroad  and  street  car  fares,  your  land- 
lord's rent  and  almost  everything  you  buy  in 
which  the  "  output "  is  limited  in  order  to  ad- 
vance the  price? 

Does  that  repay  the  exactions  of  five  hundred 
trusts?  Does  that  repay  the  premium  you  have 
to  pay  to  a  speculator  every  time  you  need  to 
use  land? 

The  U.  S.  Census  counts  as  a  part  of  our 
"wealth"  the  value  of  land.  Suppose  two  men 
are  alone  in  the  country,  each  with  a  thousand 
dollars'  worth  of  tools,  seed  and  material.  The 
total  wealth  is  two  thousand  dollars,  there  is 
plenty  of  land  which  costs  nothing,  and  if  they 
are  allowed  to  do  so,  these  men  will  shortly  use 
the  wealth  in  producing  "  goods." 

But  the  bigger  one  suddenly  claims  all  the 
land  as  his.  He  will  not  allow  the  other  to  use 
any  of  it  unless  he  pays  a  thousand  dollars  for 
fifty  acres!  The  land  of  the  country,  two  bil- 
lion acres,  immediately  becomes  worth  $20  an 
acre   (it  can't  be  had  for  less).     See  how  the 


MONEY   MAKING  144 

IN    FREE    AMERICA 

*'  wealth  of  the  country  "  has  increased.  The  big 
fellow  has  $2,000  and  1,999,999,950  acrcs  at  $20 
per  acre,  and  the  little  one  has — nothing  but  a 
bare  living.  There  is  a  great  increase  in 
"values,"  a  far  larger  average  of  resources,  a 
boom  in  real  estate  and  great  prosperity — for 
the  big  fellow. 

Says    Mr.    J.    P.    Kohler    in    "All    About 
Panics  " : 

"  Sales  of  vacant  lots  on  the  installment  plan  are  ad- 
vertised very  largely  in  all  the  papers  of  our  cities  and 
larger  towns,  and  I  have  seen  such  advertisements  in  papers 
published  in  the  smaller  towns  of  the  country.  When  a 
3'^oung  man  or  a  young  woman,  with  a  weekly  or  monthly 
wage  or  salary,  begins  to  carry  one  or  more  outside  lots, 
which  he  has  bought  on  the  installment  plan,  that  young 
man  or  young  woman  finds  it  necessary  to  economize  in 
his  or  her  purchases  of  the  articles  for  consumption  they 
have  been  previously  accustomed  to  buy.  In  this  world 
we  cannot  eat  our  cake  and  have  it  too,  and  when  we  be- 
gin to  buy  Long  Island  sand  or  Seattle  swamps  on  the 
installment  plan  we  are  obliged  to  economize  elsewhere; 
that  is,  as  our  money  goes  out  for  lots,  we  begin  to  save, 
first  on  our  little  luxuries  and  later  on  the  necessaries. 
And  when  ten  million  consumers  in  the  United  States  start 
in  to  practice  such  economy,  while  they  are  paying  for 
lots,  by  installments,  the  storekeeper  begins  to  complain 
of  poor  business  and  the  men  who  trade  in  luxuries  begin 


145  MONEY   MAKING 

IN   FREE    AMERICA 

to  go  to  the  wall.  The  dealers  in  luxuries  suffer  first  in 
the  period  of  depression  and  they  are  among  the  very  first 
to  fail.  When  one  buys  ice  cream,  soda,  or  cigars  or  a 
magazine  or  paper,  he  gives  employment  to  those  who 
produce  such  things ;  but  when  he  buys  Long  Island^  sand 
or  New  Jersey  '  fortune  makers  '  on  the  installment  plan 
he  gives  employment  to  no  one,  save  perhaps  a  few  selling 
agents,  a  surveyor  and  a  plowman."  Each  of  us  suffers 
through  the  land  boomers'  profits. 

Comparing  what  you  do,  its  extent  and  effi- 
ciency, with  what  a  mechanic  does,  and  gets,  your 
work  is  really  worth  perhaps  $5,000  or  $10,000 
a  year.  You  manufacture  intelligently  and 
cheaply,  perhaps  you  can  put  your  finger  on 
places  where  you  have  reduced  the  price  of 
goods ;  or,  as  a  lawyer,  you  settle  disputes  which 
would  otherwise  cost  the  disputants  high;  or  as 
a  doctor,  you  heal  people  so  that  they  can  again 
produce. 

In  a  previous  chapter  we  have  seen  how  pro- 
duction is  increasing,  in  spite  of  decreasing  op- 
portunities. Of  course  it  is;  by  the  help  of 
improved  facilities  you  can  do  much  more  than 
you  could  even  five  years  ago.  But  your  pro- 
duction is  many  times  more  than  the  average 
family's,  is  it  not?    For  you  plan,  you  are  not 


MONEY   MAKING  146 

IN    FREE    AMERICA 

a  mere  laborer;  you  guide  your  hands  or  some 
other  hands  with  an  active  brain,  whether  those 
hands  hold  pencils  or  tools.  The  hosts  of  Slavs 
and  Italians  and  sewing-girls  and  Southern 
negroes  and  such  workers  do  not  produce  any- 
where near  as  much  as  the  average.  Now  if  the 
workers  produce  annually  wealth  valued  at  $1,- 
260  for  each  family,  whether  idlers  or  workers, 
how  much  do  you,  yourself,  really  earn  and  how 
much  do  you  get?  and  is  it  increasing?  Serious 
questions  these.  Depressing  when  answered 
truly. 

Suppose  you  found  a  leak  in  your  business; 
waste  in  the  shop,  some  lines  of  your  goods  cost- 
ing too  much,  a  clerk  speculating;  someone  get- 
ting underhand  commissions  on  your  orders — 
would  you  not  stop  it  at  once,  at  all  hazards? 
Would  you  not  say :  "  The  profits  of  the  busi- 
ness will  all  leak  away  through  that." 

Taxation  costs  you  much,  stupidity  costs  you 
more.  Monopoly,  the  result  of  the  two,  costs 
you — the  business  man  or  woman — most  of  all. 

Every  time  a  trust  which  is  sheltered  from 
competition  arbitrarily  raises  prices,  consump- 


147  MONEY   MAKING 

IN    FREE    AMERICA 

tion  falls  oif  because  people  cannot  afford  to 
buy  as  much  as  formerly ;  then  the  trust  does  not 
need  as  many  workmen  and  some  are  discharged, 
they  compete  for  other  jobs,  and  so  lower  the 
rate  of  wages  and  still  further  lessen  the  general 
ability  to  buy;  thus  trade  is  depressed,  whilst 
the  competition  in  unmonopolized  businesses  is 
increased.  Or  if  the  trust  is  in  control  of  a  raw 
material,  the  increased  price  to  manufacturers 
compels  them  to  charge  more  for  their  finished 
products,  which  in  turn  limits  consumption,  and 
so  on. 

This  process  is  going  on  every  day.  If  you 
like  that  sort  of  thing,  you  can  have  plenty  more 
of  it.  You  can  have  my  share.  Only  don't 
think  your  little  land  value  interests  repay  you 
for  your  losses  through  these  exactions. 


CHAPTER   XI 

THE    FRUITS    OF    INJUSTICE 

"  The  growth  of  wealth  and  of  luxury,  wicked,  wasteful 
and  wanton,  as  before  God  I  declare  that  luxury  to  be, 
has  been  matched  step  by  step  by  a  deepening  and  deaden- 
ing poverty,  which  has  left  whole  neighborhoods  of  people 
practically  without  hope  and  without  aspiration." — Bishop 
Henry  C.  Potter,  of  New  York. 

"TVJ EWSPAPER  prosperity  is  like  the  paper 
•^  ^  riches  which  the  Chinese  offer  up  to  their 
gods.  Statistics  are  ^iven  to  show  that  the 
"  average  "  wealth  has  greatl}^  increased  and  that 
the  volume  of  business  is  much  larger  than 
usual,  and  we  are  expected  to  rejoice.  The 
writer  sometimes  goes  to  a  fishing  club  of  which 
Cornelius  Vanderbilt  was  a  member.  One  of 
the  standard  jokes  there  w^as  that  the  thirty 
members  are  worth  on  an  average  over  two  mil- 
lions apiece — that  is,  Cornelius  sixty  millions 
and  the  rest  of  us  nothing.  It  takes  a  lot  of 
poor  people  to  make  the  "  average." 

With  most  people  it  is  hard  times  all  the  time ; 

148 


149  MONEY   MAKING 

IN   FREE    AMERICA 

stocks  may  go  up,  on  which  dividends  have  to  be 
"  earned  "  by  them  and  their  fellows,  and  "  trade 
may  be  good,"  but  it  is  always  good  for  the 
other  fellows. 

Times  are  good  for  some  people.  First  there 
are  the  boodlers  and  the  men  who  get  fat  offices, 
with  little  to  do  except  draw  their  salaries  out 
of  the  public  purse.  If  you  are  one  of  these 
and  are  sure  of  your  job,  you  needn't  read  any 
more  of  this  book. 

Then  there  are  the  owners  of  protected  indus- 
tries— especially  those  having  exclusive  rights  or 
forming  part  of  a  trust.  They  have  been  helped 
by  a  tariff  which  squeezes  more  dollars  out  of 
the  consumers,  and  for  the  time  being  some  of 
them  are  prosperous.  Of  course,  the  heavier 
taxes  on  raw  materials,  such  as  wool  or  iron, 
hurt  some  manufacturers,  but  in  most  cases  the 
increased  taxes  are  all  shifted  on  to  the  con- 
sumer. 

And  these  are  better  times  for  a  good  many 
landlords — those  who  are  able  to  charge  the  men 
who  want  land  to  work  on  for  the  privilege  of 
using  it.     You  see  the  Dingley  law  raised  the 


MONEY   MAKING  150 

IN   FREE   AMERICA 

taxes  on  lumber,  lime,  iron  ore,  coal  and  most 
everything  else  produced  from  land,  so  that 
there  is  more  demand  for  the  products  of  land. 
Here  is  where  the  owner  of  timber  land,  or  coal 
seams,  or  ore  deposits,  gets  in  his  "  work."  He 
knows  that  the  people  need  the  things  he  con- 
trols, and  accordingly  raises  his  charges  for  the 
use  of  his  land.     So  he  is  more  prosperous. 

But  how  about  people  who  are  not  office- 
holders, or  protected  manufacturers,  or  land- 
lords? Are  they  all  enjoying  prosperitj^?  Hon- 
estly, now,  are  you  getting  all  the  wealth  to 
which  your  skill,  industry,  and  intelligence  en- 
title you?  Do  you  really  think  the  country  is 
prosperous?  If  you  do,  read  these  extracts  from 
the  daily  papers  of  the  last  decade. 

A  tree  is  known  by  its  fruits.  Here  are  some 
samples  of  the  early  crop — the  harvest  is  yet  to 
come.  (N.  Y.  World,  Jan.  4,  1898)  :  A  year 
of  "Good  Times."  (See  p.  255,  note.) 

"  President  Harper,  of  the  Chicago  University,  the  es- 
tablishment to  which  John  D.  Rockefeller  has  given  some- 
thing like  $8,000,000,  stood  up  irr  the  Auditorium  at  the 
quarterly   convocation   and   said   that   three    students    had 


151  MONEY   MAKING 

IN   FREE   AMERICA 

died  of  starvation.  Of  the  five  deaths  which  have  occurred 
in  five  years  at  the  university  three  are  directly  traceable 
to  starvation." 

So  brains  won't  save  you.  In  fact,  brains  are 
really  more  needed  for  spending  money.  Wit- 
ness the  following  as  early  as  1898 — the  hard 
times  had  passed  away  for  some  people.  (N. 
Y.  Press,  Jan.  25,  1898)  : 

"  On  such  a  magnificent  scale  have  the  orders  been 
given  for  the  ball  of  Miss  Josephine  Drexel  by  Mr.  and 
Mrs.  Anthony  Drexel,  in  Horticultural  Hall,  Philadelphia, 
to-night,  that  it  is  predicted  that  the  affair  will  be  the 
most  costly  of  this  winter.  It  is  expected  that  at  least 
100  New  Yorkers  will  go  to  the  ball  to-night.  Some  of 
those  going  are  Mr.  and  Mrs.  John  Jacob  Astor,  Perry 
Belmont,  Mrs.  Henry  Sloane,  William  K.  Vanderbilt,  Mr. 
and  Mrs.  Ogden  Mills. 

"  There  will  be  1,500  cotillion  favors.  They  will  cost 
$3,000.  Among  the  great  many  different  articles  that  go 
to  make  up  the  list  of  favors  are  sparrgled  pink,  blue  and 
white  feather  fans,  feathered  wands,  satin  muffs,  each 
with  a  coronet  and  big  satin  bow ;  directoire  canes,  aigrettes 
and  satin -work  bags.  Among  the  articles  for  the  men  are 
court  orders  with  ribbons,  four-in-hand  whips,  walking 
sticks,  Japanese  paper  cutters,  paper  weights,  and  so  on." 

A  stock  excuse  for  ostentation  is  that  it 
"makes  work"  for  the  poor.    Of  course  this  is 


MONEY   MAKING  153 

IN   FREE   AMERICA 

onty  an  excuse,  for  what  the  poor  need  is  things, 
not  more  work.  But  not  all  of  them  get  either 
work  or  things.  For  instance:  (N.  Y.  Sun, 
Jan.  21,  1898)  : 

No   Food;   No    Fuel;   No   Money;   No   Work 

"Valentine  Schlegel,  a  laborer  of  1235  Green  Avenue, 
Brooklyn,  has  been  sick  and  out  of  work  since  early  in 
November,  and  his  family  are  on  the  verge  of  starvation. 
Schlegel  was  employed  by  a  bicycle  tube  factory.  He 
caught  cold  because  of  insufficient  clothing,  and  was  se- 
verely ill  with  pleuro-pneumonia  about  Thanksgiving  time. 
Since  then  he  has  been  unable  to  do  anything  but  the 
lightest  kind  of  work.  His  wife  takes  in  washing  when 
she  can,  but  has  been  unable  to  find  work  lately.  There 
are  three  children,  2,  4,  and  11  years  old  respectively. 
Yesterday  there  was  no  food  in  the  house,  except  a  little 
raw  cabbage;  no  fuel  except  scraps  of  soft  wood,  and  no 
money  to  buy  more  of  either." 

It's  an  ill  wind  that  blows  nobody  good,  and 
though  the  metal  workers  maj^  complain,  the 
owner  of  metal  lands  does  not.  The  net  profits 
of  the  Steel  Trust  last  year  were  just  about 
equal  to  the  entire  amount  paid  in  wages,  and 
the  wages  constituted  less  than  25  per  cent,  of 
the  total  value  of  the  product.  (See  their  own 
Report.)      According   to  this   statement,   each 


15S  MONEY   MAKING 

IN   FREE    AMERICA 

working  man  employed  by  the  Steel  Trust 
earned,  on  an  average,  not  only  the  amount  paid 
to  him,  but  100  per  cent,  profit  besides  for  his 
employer. 

Everyone  knows  that  the  poverty  noticed  in 
1898  is  more  noticeable  now.  Not  to  sicken 
ourselves  further  with  scanning  the  close-wTit- 
ten  record  of  misery,  we  will  skip  at  once  to 
1908. 

The  law  helps  only  some  people. "  Says  the 
Philadelphia  (Pa.)  Record,  Oct.  2,  1908: 

BROKE    LAW    TO    FEED    FAMILY 
Prisoner's  Story  of  Hard  Luck  Gains  Him  Freedom 

When  Thomas  George,  of  Gardner's  Point,  Philadel- 
phia, was  haled  before  Justice  of  the  Peace  George  R. 
Thompson,  of  Camden,  yesterday  on  a  charge  made  by 
Fish  and  Game  Warden  C.  W.  Folker  of  fishing  with  a 
net  of  smaller  mesh  than  the  law  allows,  the  prisoner 
burst  into  tears  and  told  a  story  of  want  that  excited  the 
sympathy  of  the  'Squire. 

He  said  that  he  was  out  of  work  and  had  borrowed  the 
net  and  a  rowboat  and  had  crossed  to  the  New  Jersey 
shore  to  fish  for  catfish  so  that  his  family  could  keep  from 
starving.  By  telephone  the  'Squire  corroborated  the  story 
and  only  suspended  sentence. 


MONEY   MAKING  154 

IN    FREE    AMERICA 

That  was  in  1908.  And  there  was  even  then 
abundance  of  money. 

There  must  be  great  inequalities,  of  fortune 
just  as  there  must  be  great  inequaHties  of  abili- 
ties. But  it  cannot  be  that  there  should  be  such 
inequalities  as  this:  with  abundance  of  money 
there  is  bitter  want. 

Doubtless  the  rich  are  compassionate  and  give 
great  sums :  but  few  of  them  as  yet  realize  that 
their  wealth  is  mainly  the  product  of  the  labor 
of  those  to  whom  they  give. 

Though  tales  of  distress  and  poverty  are 
not  acceptable  reading  altogether — not  all  the 
cases  can  be  hidden.  Here  are  two  society  news 
items  from  one  paper,  both  from  the  New  York 
Times,  Aug.  2,  1908: 

$1,500    OF    MUSIC    FOR   BABY 

Mrs.  Charles  Strong  Takes  New  York  Orchestra  to 
Erie  for  Grandson's  Fete 

Little  Reginald  Ronalds,  of  Erie,  Penn.,  is  only  nine 
months  old,  but  a  wonderful  party  will  be  given  for  him 
to-morrow  at  his  grandmother's  beautiful  home  in  Erie. 
]\Irs.  Charles  H.  Strong  is  the  grandmother  who  will  be 
hostess.  More  than  $1,500  will  be  spent  on  music  alone. 
Mrs.  Strong  will  have  an  orchestra  of  forty  musicians  un- 
der Nahan  Franko,  who  will  go  to  Erie  for  her  fete.     A 


155  MONEY   MAKING 

IN    FREE    AMERICA 

private  car  will  leave  Jersey  City  to-night  with  Franko 
and  his  men.  Mrs.  Strong  will  have  other  elaborate  en- 
tertainments for  her  guests  in  honor  of  the  lucky  baby. 

LOST  HIS  JOB,  ENDS  LIFE 
Herman  Ihne,  50  years  old,  killed  himself  yesterday  in 
his  room  at  76  Grand  Street,  Jersey  City,  by  shooting 
himself  in  the  head  with  a  revolver.  Mrs.  James 
McCarthy,  with  whom  he  boarded,  said  he  had  been  em- 
ployed as  a  compositor  on  a  New  York  paper,  but  had 
lost  his  position  a  week  ago,  and  became  despondent. 

Good  as  it  is  to  get  these  defeated  people  back 
to  the  abandoned  farms,  it  is  but  a  stop  gap. 
The  cause  of  the  defeat  must  be  removed. 

Of  course  the  main  reason  that  farms  are 
abandoned  is  that  it  has  become  impossible  to 
make  a  living  on  them — and  pay  the  interest  on 
mortgages,  or  the  price  demanded  by  owners  of 
the  good  farms.  But  some  of  those  who  aban-  / 
doned  the  farms,  "dazzled  by  the  glamour  of 
city  life,"  have  become  rich  indeed.  (N.  Y. 
Ti7nes,  Sept.  9,  1908)  : 

ASKS    $25,000    YEAR    FOR    BABY 

Needs  It,  Says  Mrs.  J.  E.  Martin,  Jr.,  Because  He's 

Accustomed  to  Luxury 

"  In  order  that  he  be  brought  up  in  the  station  in  life 
in  which  he  has  been  accustomed,  associate  with  the  people 


MONEY   MAKING  1S6 

IN    FREE    AMERICA 

■with  whom  he  is  entitled  to  associate,"  Mrs.  Gladys  Robin- 
son Martin,  widow  of  the  late  James  E.  Martin  of  Great 
Neck,  L.  I.,  has  entered  a  petition  in  Brooklyn  that  air 
allowance  be  made  to  her  out  of  the  income  of  her  3-year- 
old  baby,  James  E.  Martin,  Jr.,  to  bring  him  up  "  accord- 
ing to  his  wealth  and  position." 

Mrs.  Martin  states  that  her  son  has  always  associated 
with  people  of  large  wealth,  and  that  as  she  has  nothing 
but  personal  effects  and  a  yearly  income  of  $2,000  from 
her  father,  James  A.  Robinson,  she  finds  it  necessary  that 
an  allowance  be  made  to  her  as  the  baby's  guardian.  To 
bring  him  up,  exclusive  of  his  education,  she  says  $25,000 
a  year  is  necessary. 

No  one  would  grudge  that  baby  all  the  bene- 
fit that  can  come  to  him  from  the  $25,000  a  j^ear; 
but  such  fortunes  seem  to  involve  such  misfor- 
tunes as  this: 

SENT    TO    PRISON;    FAMILY    STARVING 

So  weak  from  starvation  that  he  could  hardly  stand,  and 
weeping  bitterly  as  he  told  of  the  similar  plight  of  his  wife 
and  five  children,  Patrick  Gilmartin,  a  plasterer,  twenty- 
eight  years  old,  was  arraigned  before  Magistrate  Cornell 
in  West  Side  Court  yesterday,  charged  with  vagrancy.  He 
was  arrested  while  applj'ing  at  the  basement  door  of  a  resi- 
dence in  West  58th  street  for  a  cup  of  coffee  that  he  might 
sustain  his  little  remaining  strength  in  his  search  for  work. 

After  the  distressing  story  had  been  told  Gilmartin  was 
committed  to  the  workhouse  for  six  months,  but  this,  it  was 


157  MONEY    MAKING 

IN    FREE    AMERICA 

said,  was  the  most  merciful  disposition  that  could  be  made 
of  the  case;  because  while  he  is  there  the  Department  of 
Charities  will  be  called  upon  to  look  after  the  welfare  of 
his  wife  and  children,  who  now  exist  in  two  rooms  on  the 
second  floor  of  No.  258  East  76th  street. 

With  quivering  lips  and  trembling  limbs  Gilmartin  told 
Magistrate  Cornell  that  he  had  been  out  of  employment  five 
months  and  had  been  compelled  to  sell  his  few  household 
efl^ects  one  by  one  to  obtain  money  for  food  for  his  family. 
Day  after  day  he  had  walked  the  streets  in  a  fruitless  ef- 
fort to  get  employment.  Once  he  had  been  strong,  he  said, 
but  two  years  ago  he  underwent  an  operation  for  the  re- 
moval of  a  tumor  on  his  head  and  since  then  he  had  found 
it  hard  to  earn  money. 

Then,  he  continued,  the  strike  in  the  building  trades  had 
come  and  he  was  forced  to  go  out  with  the  other  union 
plasterers,  sorely  as  he  needed  his  small  wages  for  the 
support  of  his  wife  and  little  ones.  Since  then,  one  mis- 
fortune had  followed  another. 

Magistrate  Cornell  asked  Miss  McQuade,  a  probation 
officer,  to  investigate  this  story.  She  went  to  the  76th 
street  place,  and  upon  her  return  said  she  had  found  the 
family  in  the  utmost  destitution.  The  wife  was  nursing  a 
baby  eight  months  old;  there  were  three  other  children, 
three,  five  and  seven  years  old,  respectively,  and  the  five 
had  had  only  one  loaf  of  bread  between  them  in  two  days. 
That  had  been  provided  by  a  kind-hearted  neighbor.  The 
fifth  child,  a  boy  of  ten,  was  in  the  Willard  Parker  Hos- 
pital, sufl^ering  from  diphtheria.  It  was  then  decided  to 
send  Gilmartin  to  the  workhouse  and  leave  the  care  of  his 
family  to  the  Charities  Department. — New  York  Herald^ 
December  22,  1908. 


MONEY   MAKIXG  158 

IX    FREE    AMERICA 

Now,  vast  sums  are  acquired  without  work. 
REFUSES    $6,000,000    OFFER 


Union  Natural  Gas  Co.  Holds  Out  for  $10,000,000 

FROM  Standard  Oil 

Special  to  The  New  York  Times. 

Pittsburg,  Aug.  25,  1908.— An  offer  of  $6,000,000  made 
by  the  Standard  Oil  Company  for  the  holdings  of  the 
Union  Natural  Gas  Company  in  West  Virginia  was  to-day 
refused  by  the  last-named  company,  which  asks  $10,000- 
000  for  the  holdings.  The  Union  Natural  Gas  Company, 
of  which  T.  N.  Barnsdall  is  president,  has  between  80,000 
and  100,000  acres  of  oil  and  gas  lands  in  West  Virginia, 
and  much  of  it  is  already  improved,  the  gas  being  piped 
to  towns  in  Ohio  and  West  Virginia,  and  about  85,000  peo- 
ple being  supplied  with  light  and  fuel  from  the  wells. 

The  Union  Natural  Gas  Company  was  incorporated  in 
1902,  with  a  capital  of  $6,000,000,  which  was  later  in- 
creased to  $8,000,000,  and  still  more  recently  to  $9,000,000. 

In  the  face  of  this,  we  read,  Denver  (Colo.) 
News,  Sept.  19,  1908: 

MAN,    WIFE    AND    FIVE    CHILDREN    FACE 
STARVATION 


Woman  is  III  in  a  Tent  and  Husband  Unable  to  Get 

Work 

A  sick  wife,  five  little  children  and  a  man  out  of  work 
face  starvation  in  a  tent  at  Sixth  and  Platte  streets.     Ed- 


159  MONEY   MAKING 

IN   FREE    AMERICA 

ward  Stout  is  unable  to  leave  his  suffering  wife  to  gain  a 
livelihood  for  the  family  for  fear  that  she  will  die  from 
want  of  care. 

The  case  is  a  pitiable  one.  Absolutely  destitute^  the 
family  has  been  kept  alive  for  several  weeks  only  through 
the  efforts  of  neighbors,  who  have  supplied  a  little  money 
for  groceries  and  the  bare  necessities  of  life.  The  chil- 
dren range  in  age  from  4  to  13. 

The  family  formerly  lived  in  Bellville,  Kans.,  where  the 
mother  was  a  member  of  the  Degree  of  Honor  and  the 
father  of  the  A.  O.  U.  W.  Stout  has  recently  been  com- 
pelled to  drop  from  membership  in  the  order,  not  having 
the  necessary  money  to  pay  his  dues.  He  is  still  a  mem- 
ber of  the  Modern  Brotherhood. 

The  last  line  is  not  intended  to  be  sarcastic — 
that  is  the  name  of  a  society. 

The  wicked  Socialistic  papers  have  reprinted 
so  many  items  of  society  events  that  the  wealthy 
now  reserve  their  ostentation  for  private  display 
to  their  own  set.  Nevertheless,  some  of  the  items 
are  so  notable  that  the  reporters  give  accurate 
descriptions.  This  is  from  the  New  York  Times 
of  Sept.  17,  1908: 

$4,000,000    APIECE    FOR    DINNER    GUESTS 

Favors  at  Singer  Golden  Wedding  Feast  Were  V/orth 
$l6,000j000,     Gifts  to  Four  Children 


MONEY   MAKING  160 

IN    FREE    AMERICA 

If  that  is  right,  can  this  be  right  too?    From 
the  New  York  Mail  and  Express,  Oct.  1,  1908: 

Starves;  Dies  on  Bread  Line 


While  standing  in  the  bread  line  at  Eighty-first  street 
and  East  End  avenue  to-day,  a  man  about  forty-five  years 
old  collapsed  and  died  before  Dr.  Pease  had  arrived  from 
the  Presbyterian  hospital. 

The  man  was  cleanly  and  comfortably  dressed,  but  had 
suffered  for  lack  of  nourishment.  He  had  been  in  the  line 
for  a  half  hour  and  held  a  bread  ticket  in  his  hand. 

Nor  are  these  horrors  confined  to  the  great 
overcrowded  cities. 

Special  to  The  Daily  News,  Hamilton,  O.,  Oct.  1. 
ON    VERGE    OF    STARVATION 


Former  Dayton  Man,  Out  of  Work  in  Hamilton,  Com- 
mits Suicide  by  Hanging 
Despondent  because  he  was  out  of  work.  Max  Glock,  53, 
formerly  of  Dayton,  suicided  by  hanging  at  his  home  to- 
day. He  leaves  a  widow  and  six  children,  the  oldest  being 
18  and  the  youngest  2  years  of  age.  Glock  worked  for 
the  National  Cash  Register  company,  but  has  been  out  of 
employment  for  a  year.  His  family  is  on  the  verge  of 
starvation. 

If  those  children  live   (the  death  rate  of  the 
poor  is  high)  their  labor  will  help  keep  the  palace 


V 


161  MONEY   MAKING 

IN   FREE    AMERICA 

dwellers  in  luxury;  and  perhaps  they  will  vote 
to  maintain  the  present  system  because  occa- 
sionally one  of  the  under  class  gets  on  top — and 
one  of  the  upper  class  goes  under.  But  the  boy 
who  wanted  to  swap  for  a  circus  ticket  his  1- 
chance-in-20-million  of  being  President  was 
wise.  .  y 

The  conditions  that  promote  waste  and  want 
promote  vice  and  crime  as  well.  Says  the  New 
York  World  of  Aug.  13,  1908: 

"  Hard  times  are  the  cause  of  a  widespread  epidemic  of 
wife  desertion  in  the  poorer  districts  of  the  city,  accord- 
ing to  reports  turned  in  by  the  visitors  of  the  Children's 
Aid  Society.  In  the  instances  cited  by  Mrs.  Edith  K. 
MacArthur,  the  visitor  of  the  East  Eighty-eighth  street  sta- 
tion, the  primeval  instinct  of  the  survival  of  the  fittest  is 
responsible  for  the  epidemic. 

"  *  Conditions  in  my  district  are  really  so  terrible/  said 
Mrs.  MacArthur,  '  that  I  believe  if  work  is  not  forthcom- 
ing immediately  for  the  men  the  whole  neighborhood  will 
degenerate  into  a  condition  which  will  shock  New  York. 
The  sufferings  that  the  people  have  been  through,  and 
which  many  are  still  experiencing,  are  having  a  bad  emo- 
tional effect.  The  instinct  of  self-preservation  is  becoming 
stronger  with  the  men  than  their  love  of  wife  and  children. 

"  *  It  was  only  a  few  days  ago  that  I  discovered  a  young 
wife  who  had  been  deserted  by  her  husband  three  weeks 
before  her  child's  birth.     She  told  me  her  husband  said 


MONEY   MAKING  169 

IN    FREE    AMERICA 

plainly  that  he  had  all  he  could  do  to  shift  for  himself, 
and  that  he  was  going  to  leave  her  because  otherwise  both 
would  starve. 

"  'Neighbors  cared  for  her  until  her  child  was  born, 
but  when  I  discovered  her  both  she  and  her  week-old  baby 
were  practically  dying  of  starvation. 

"  '  Where  last  year  I  found  only  one  or  two  cases  of 
deserted  wives  in  my  district,  in  the  last  few  months  I 
have  run  across  scores.'  " 

Dozens  of  children  were  offered  for  sale  in 
New  York  last  winter  by  parents  too  poor  to 
provide  for  them. 

Tliis  recital  of  the  results  of  INIonopoly — the 
extravagance  and  luxury  of  the  rich  on  one  side, 
and  the  poverty  and  misery  of  the  poor  on  the 
other — might  be  continued  indefinitely.  Enough 
has  been  given  to  show  the  kind  of  good  times 
we  have  always  with  us. 

John  Ruskin  said: 

"  I  have  listened  to  many  ingenious  persons 
who  saj'^  we  are  better  off  now  than  we  ever  were 
before.  I  do  not  know  how  well  off  we  were 
before;  but  I  know  positively  that  many  very 
deserving  persons  of  my  acquaintance  have 
great  difficulty  in  living  under  these  improved 
circumstances ;  also,  that  my  desk  is  full  of  beg- 


163  MOXEY   MAKING 

IN    FREE    AMERICA 

ging  letters,  eloquently  written  either  by  dis- 
tressed or  dishonest  people;  and  that  we  cannot 
be  called,  as  a  nation,  well  oiF,  while  so  many  of 
us  are  living  either  in  honest  or  in  villainous  beg- 
gary. For  my  own  part,  I  will  put  up  with  this 
state  of  things,  passively,  not  an  hour  longer. 
I  am  not  an  unselfish  person,  nor  an  evangelical 
one;  I  have  no  particular  pleasure  in  doing 
good ;  neither  do  I  dislike  doing  it  so  much  as  to 
expect  to  be  rewarded  for  it  in  another  world. 
But  I  simply  cannot  paint,  nor  read,  nor  look 
at  minerals,  nor  do  anything  else  I  like,  and  the 
very  light  of  the  morning  sk}^  has  become  hate- 
ful to  me,  because  of  the  misery  that  I  know  of, 
and  see  signs  of  where  I  know  it  not,  which  no 
imagination  can  interpret  too  bitterly." 


CHAPTER  XII 

THE    "CHARITY"    PROBLEM 

"  There  is  something  far  more  injurious  to  our  race  than 
poverty;  it  is  misplaced  charity.  Of  every  thousand  dol- 
lars spent  upon  so-called  objects  of  charity,  it  is  not  an 
over-estimate  to  say  that  nine  hundred  of  it  had  better  be 
/  thrown  into  the  sea.  It  is  so  given  as  to  encourage  the 
growth  of  those  evils  from  which  spring  most  of  the  misery 
of  human  life.  The  relations  of  human  society  are  so 
complex,  so  interwoven,  that  the  creation  of  a  new  agency 
intended  to  benefit  one  class  almost  inevitably  operates  to 
the  injury  of  the  other.  The  latter  being  the  growth  of 
natural  causes,  is  by  far  the  most  important  to  preserve." — 
Andrew  Carnegie  in  "  The  Gospel  of  Wealth." 

IT  is  hardly  necessary  to  tell  you  that  of  all 
the  pretended  cures  for  poverty  the  worst 
is  that  called  "  Charity."  Yet  the  average 
American  believes  that  while  there  must  be 
something  wrong  somewhere  in  our  social  system, 
we  either  cannot  find  out  just  what  it  is,  or  if 
found,  cannot  cure  it,  and  therefore  we  must 
do  what  we  can  to  patch  things  up  with  charity. 
So  you  give  money  to  this  or  that  charitable  in- 
stitution, perhaps  you  personally  relieve  some  of 

164 


166  MONEY   MAKING 

IN   FREE   AMERICA 

the  "  deserving  poor,"  and  you  pay  taxes  to  sup- 
port public  hospitals,  orphan  asylums  and  poor- 
houses.  But  the  evils  which  charity  is  intended 
to  cure  are  not  diminished  in  the  least. 
7^  If  men  learned  wisdom  from  experience 
alone,  the  world  would  have  long  ago  found  that 
charity  is  a  failure  as  a  means  of  relieving  the 
suffering  due  to  involuntary  poverty.  For  in 
all  ages  and  in  all  countries  charity  has  been 
practised  to  some  extent;  with  the  same  result 
everywhere:  increasing  want  and  misery  which 
appeals  for  relief.  But  in  spite  of  this  proof 
that  something  better  than  alms-giving  is  needed, 
we  find  in  America  to-day  the  most  elaborate 
systems  of  charities  in  the  world.  I  estimate 
the  annual  outlay  in  public  and  private  charity 
in  New  York  City  alone  at  over  28  million  dol- 
lars; the  expenditure  in  the  United  Sta|:es  is  be- 
lieved to  be  about  225  millions.  And  even  this 
great  sum  is  far  too  little  for  the  increasing 
multitudes  of  those  whose  poverty  compels  them 
to  seek  help.  ,  The  number  of  these  is  steadily 
outrunning  the  increase  of  population.  "  The 
demand  for  relief  always  keeps  considerably  in 


MONEY   MAKING  166 

IN    FREE    AMERICA 

advance  of  the  supply,"  is  the  testimony  of  Pro- 
fessor Amos  G.  Warner  in  his  book  "  American 
Charities." 

Yet  there  are  2,040  organizations  in  New  York 
City  alone,  besides  the  churches.v  One  reason 
why  charity  flourishes  and  extends  itself  in  every 
direction  can  best  be  stated  in  the  words  of 
Elbridge  T.  Gerry,  a  New  York  millionaire 
long  President  of  the  Society  for  the  Prevention 
of  Cruelty  to  Children.  In  conversation,  INIr. 
Gerry  said:  "If  it  were  not  for  the  charitable 
institutions  supported  by  the  rich,  neither  life 
nor  property  would  be  safe  on  Fifth  Avenue 
to-day."  As  Mr.  Gerry  lives  on  Fifth  Avenue, 
and  draws  a  great  income  annually  from  real 
estate  in  New  York,  he  is  naturally  inclined  to 
aid  in  insuring  against  the  paupers  created  by 
the  system  of  landlordism.  It  is  feared  that  the 
poor  would  seize  the  property  of  the  rich  were 
it  not  for  the  soothing  syrup  of  charity. 

In  its  origin  charity  sprang  from  the  noblest 
feeling — that  sympathy  with  others  which 
prompts  us  to  relieve  sufl*ering.  The  impulse  to 
feed  the  hungry,  clothe  the  naked  and  shelter 


/V^»?^/      $J      (^^f       jLrvxi^A.^^^ 


167  MONEY   MAKING 

IN    FREE    AMERICA 

the  homeless  is  wholly  creditable.  But  the  mod- 
ern machinery  of  public  and  private  charities, 
supported  by  taxation  or  by  private  funds  given 
out  of  a  sense  of  obligation,  is  abominable.  That 
its  organized,  mechanical  treatment  of  its  sub- 
jects gives  no  real  pleasure  to  those  who  main- 
tain it,  proves  that  it  is  not  a  means  by  which 
the  kind-hearted  can  show  their  sympathy  with 
their  less  fortunate  fellow  men. 

For  a  long  time  private  charity  took  the  form 
of  alms  of  food,  clothing,  medicine,  etc.,  or  in 
some  cases  of  "  giving  work  "  to  the  deserving 
poor.  Hospitals  for  the  treatment  of  the  sick, 
orphan  asylums  and  houses  for  the  aged  were  a 
gradual  development,  then  came  public  institu- 
tions— work  houses,  blind  asylums,  etc.  In 
recent  years  there  has  been  a  great  increase  in 
charitable  institutions  of  all  kinds,  until  now 
every  nationality  and  creed  has  its  own  special 
benevolent  associations.  There  is  a  "  Charity  " 
for  almost  every  ailment,  and  each  has  its  home 
or  hospital.  Children's  Aid  Societies,  Lying-in 
Hospitals,  Widows'  Relief  Associations,  Homes 
for    the    Aged,    Christian    Alliance,    Hebrew 


MONEY   MAKING  168 

IN    FREE    AMERICA 

Homes,  Catholic  Protectories,  Fresh  Air  Ex- 
cursions, and  thousands  of  such  organizations, 
each  asking  for  part  of  the  taxes  taken  from 
industry,  or  for  private  donations  given  chiefly 
by  those  who  exploit  industry.  So  great  has 
been  the  growth  of  these  various  charities  that 
in  all  important  cities  there  is  a  "  Charities  Or- 
ganization Society,"  which  controls  and  regu- 
lates the  relief  work  of  the  city.  There  are  also 
State  Boards  of  Charity,  and  City,  Town  and 
Village  charity  commissioners  who  have  charge 
of  public  relief  work.  Thus  every  sort  of  aid 
to  the  poor,  sick  or  infirm  has  become  a  busi- 
ness. 

Let  us  consider  an  example  of  our  Twentieth 
Century  systematic  charities.  Take  the  Fresh 
Air  Fund.  If  you  will  look  at  the  condition  of 
the  poor  children  of  any  city,  you  can  hardly 
conclude  that  their  comfort,  their  health  or  their 
happiness  has  appreciably  increased  within  the 
last  fifteen  years,  since  this  charity  became  im- 
portant. But  even  if  it  had  a  real  effect  in  sav- 
ing the  children,  it  would  but  increase  popula- 
tion, and  the  increased  competition  in  the  nar- 


'  169  MONEY   MAKING 

IN   FREE    AMERICA 

rowed  field  would  lower  wages  and  raise  rents. 
Nor  is  there  any  logical  limit  to  it.  Why  should 
we  stop  at  giving  fresh  air  excursions  to  the 
children?  Why  not  the  shop  girls?  Why  not 
the  mothers?  Why  not  the  hard-working  me- 
chanics? And  why  should  we  make  a  limit  of! 
two  weeks?  Fresh  Air  Charity  is  one  of  those 
things  which  is  never  finished  and  never  can  be 
finished,  and  of  which  the  most  liberal  com- 
munity could  never  say:  "We  have  done 
enough." 

If  Mrs.  Elliott  F.  Shepard  establishes  a 
"  Home  "  which  gives  shop  girls  a  good  lunch 
for  twenty-five  cents,  girls  say:  "Well,  by  get- 
ting a  good  lunch  there,  and  breakfasting  and 
supping  on  tea  and  bread,  we  can  feed  ourselves 
on  thirty  cents  a  day,"  and  there  being  ten 
applicants  for  every  place,  competition  will 
force  them  down  to  that  way  of  living  or  to  a 
U  more  dreadful  way.  The  "  Mills  Hotels  "  have 
actually  reduced  wages  in  their  immediate  vi- 
cinity. 

The  very  competition  of  Charities  among 
themselves  reduces  the  standard  of  living.    The 


MONEY   MAKING  170 

IN    FREE    AMERICA 

Tenement  House  Chapter  of  the  Industrial 
Christian  Alliance  testifies  that  the  Alhance 
meal  tickets  will  support  a  family  of  three  for 
a  week  on  ninety  cents.  (I.  C.  A.  Report.) 
Gradually  men  have  to  learn  to  live  cheap,  bj'' 
using  these  charity  devices,  because  they  cannot 
get  wages  enough  to  live  better. 

Charity  deliberately  reduces  wages.  The 
Annals  of  the  Dorchester  (Mass.)  Conference 
says  :^' We  strive  to  make  every  applicant  for 
aid  feel  that  work  of  any  kind  is  better  than 
y  idleness,  and  that  to  accept  the  smallest  com- 
pensation and  to  perform  the  least  service  well, 
not  only  helps  to  supply  present  needs,  but  is  the 
surest  way  to  something  better."  * 

Even  the  charity  and  benevolent  trade  schools 
help  in  breaking  down  the  Trades  Unions  by 
supplying  a  generation  of  skilled  "  scabs." 

The  late  Rev.  Dr.  John  Hall  publicl}''  stated 
that  charities  tend  to  destroy  independence. 
"  Formerly,"  he  said,  "  men  felt  that  they  must 
lay  by  a  little  for  sickness  or  a  rainy  day,  and 

*  "  To  give  things  to  people  for  nothing  does  work  demoral- 
ization and  tends  always  to  lower  wages." — Rev.  W.  S.  Rains- 
ford,  D.D. 


171  MONEY   MAKING 

IN   FREE    AMERICA 

demanded  wa^es  which  would  allow  them  to  do 
so.  Now  they  can  work  cheap  and  spend  all 
they  get,  because  they  think:  If  I  get  sick  or 
destitute  I  have  only  to  look  around  and  see 
which  of  these  splendid  institutions  I  will  pat- 
ronize."   He  said  further: 

"  A  large  number  of  people  without  means  of 
support  or  family  ties  constantly  tend  to  the 
city  and  diminish  by  their  competition  the 
meager  earnings  obtainable  by  a  large  class  of 
resident  work-people.  They  do  not  know  that 
by  coming  to  the  city  they  probably  incur  desti- 
tution, disease  and  suffering. 

"Worse  than  these,  a  multitude  of  vagrants 
are  allowed  to  come  to  the  city  and  permitted  to 
remain  here,  who,  by  idleness,  debauchery  and 
disease,  add  to  the  pressing  demand  upon  chari- 
table institutions."  * 

* "  Whatever  exception  you  may  have  encountered,  you  knovi^ 
that  the  rule  is  that  those  who  receive  relief  are  or  soon  become 
idle,  intemperate,  untruthful,  vicious,  or  at  least  quite  shiftless 
and  improvident.  You  knovi'  that  the  more  relief  they  have,  as  a 
rule,  the  more  they  need.  You  know  that  it  is  destructive  to 
energy  and  industry,  and  that  the  taint  passes  from  generation 
to  generation  and  that  a  pauper  family  is  more  hopeless  to  re- 
form than  a  criminal  family." — Mrs.  Josephine  Shaw  Lowell,  on  / 
Outdoor  Relief. 


MONEY   MAKING  1T9 

IN    FREE    AMERICA 

It  is  selfish  of  employers  to  counsel  the  people 
to  be  prolific,  to  keep  the  workers  dependent 
upon  them,  to  reduce  wages,  and  by  keeping  the 
poor  people  to  keep  the  people  poor.  •  Certain 
it  is  that  every  dime  spent  in  charity  reduces 
_wages  a  dollar. 

It  is  hard  to  believe  that  organized  charity  is 
really  much  more  than  a  sop  to  conscience,  or  a 
method  of  escaping  the  results  of  wrong-doing 
in  this  life  or  in  the  next.  If  Charity  has  ceased 
to  be  considered  a  sort  of  fire  insurance,  that  is 
mainlj^  because  men  have  ceased  really  to  believe 
in  the  fire. 

Akin  to  the  direct  forms  of  charitj^  in  which 
relief  is  given  as  alms,  are  various  schemes,  pub- 
lic or  private,  advocated  with  the  general  aim  of 
"  improving  the  condition  of  the  poor."  Among 
these  are  plans  for  securing  for  the  people  who 
live  in  crowded  tenements  in  great  cities  better 
homes  either  by  laws  regulating  the  construction 
of  the  tenements,  or  by  building  model  houses 
for  the  poor  in  the  suburbs  of  the  cities.  Espe- 
cially in  New  York  City,  where,  as  in  Washing- 
ton, D.  C,  the  tenement  house  evil  has  shown 


173  MONEY   MAKING 

IN   FREE    AMERICA 

its  worst  forms,*  laws  compelling  owners  of 
tenements  to  give  each  tenant  a  certain  amount 
of  light  and  air,  and  to  make  other  small  im- 
provements, have  had  the  effect  of  increasing 
rents,  and  thus  adding  to  the  burdens  of  all  ex- 
cept the  land  owners. 

The  failure  of  such  methods  to  do  away  with 
tenement  house  evils  was  shown  by  the  late 
Henry  George,  at  a  meeting  held  in  New  York 
City,  in  1895,  to  urge  the  adoption  of  laws 
regulating  tenement  houses.  Mr.  George 
said: 

"  We  have  had  rapid  transit  in  this  city  for 
years.  It  has  made  colossal  fortunes  for  the 
Tildens,  the  Goulds  and  the  Sages,  but  it  has 
done  nothing  for  the  poor,  for  the  masses.  You 
can  turn  the  East  Side  and  its  tenements  into 
the  most  beautiful  part  of  the  city,  and  the  re- 

*  Jacob  D.  Riis,  in  Washington  Times,  Dec.  16,  1903: 
"  I  am  not  easily  discouraged.     But  I  confess  I  was  surprised 
by  the  sights  I  have  seen  in  the  national  capital.    You  people  of 
Washington  have  alley  after  alley  filled  with  hidden  people  whom 
you  don't  know.     There  are  298  such  alleys. 

"  They  tell  me  the  death  rate  among  the  negro  babies  born  in 
these  alleys  is  475  out  of  a  thousand  before  they  grow  to  be  1 
year  old.  Nearly  one-half!  Nowhere  I  have  ever  been  in  the 
civilized  world  have  I  ever  seen  such  a  thing  as  that." 


MONEY   MAKING  1T4 

IN    FREE    AMERICA 

suit  will  be  that  our  millionaires  will  soon  be 
living  there. 

"  There  are  men  in  this  city  to-day  who  are 
hungry;  there  are  men,  women  and  children  half 
clad.  What  do  j'^ou  think  of  a  proposition  to 
help  the  hungry  by  which  no  one  will  be  allowed 
to  eat  unless  he  goes  to  Delmonico's,  or  to  clothe 
the  naked  unless  they  have  their  garments  made 
by  first-class  tailors?  The  proposition  of  your 
committee  means  just  that.  You  want  to  tear 
down  those  tenements  and  let  no  one  live  unless 
he  has  600  feet  of  cubic  air.  Where  are  the 
people  turned  out  from  these  houses  to  go?  Into 
the  streets,  into  the  police  stations,  that  this  very 
night  are  already  crowded,  or  into  the  alms- 
houses? " 

Since  then,  we  have  had  two  reform  adminis- 
trations of  New  York  city  government,  yet  we 
read  in  the  report  of  the  Tenement  House  Com- 
mission for  1907  that  there  are  still  325,000  dark 
rooms — nearly  a  third  of  a  million — in  the  tene- 
ments of  New  York  City,  rooms  with  no  win- 
dows at  all. 

Anyone  who  knows  the  horrors  of  those  breed- 


175  MONEY   MAKING 

IN    FREE    AMERICA 

ing  places  of  dirt,  consumption  and  vice  will  feel 
that  law  is  not  an  efficient  tool  with  which  to 
improve  the  social  condition. 

In  so  far  as  certain  charities  undertake  to 
give  work  to  the  idle,  they  only  compete  with  un- 
assisted workers  and  thus  force  down  wages  and 
increase  distress  in  other  directions.  When  kind- 
hearted  women  start  bureaus  for  employing  sew- 
ing women,  the  goods  produced  under  charity 
direction  undersell  those  made  by  self-support- 
ing women,  and  reduce  the  wages  of  the  women. 
This  is  true  of  all  similar  charities. 

Agencies  for  securing  employment  for  serv- 
ants or  other  workers  merely  fill  temporary 
vacancies,  or  replace  one  worker  by  another.  In 
no  case  do  they,  or  can  they,  increase  the  total 
of  opportunities  to  work. 

Then  there  are  other  plans  for  getting  the  un- 
employed workers  out  into  the  farming  districts 
where  it  is  hoped  they  will  be  able  to  employ 
themselves.  All  these  semi-charitable  move- 
ments are  based  on  the  idea  that  "  the  poor  "  are 
an  inferior  order  who  need  to  have  things  done 
for   them   by  government   or   by  the    "  upper 


MONEY   MAKING  176 

IN   FREE   AMERICA 

classes,"  who  do  nothing;  and  all  are  entirely 
insufficient  to  alleviate,  much  less  remove,  the 
distress  due  to  low  wages  or  lack  of  employ- 
ment. The  nearest  approach  to  effective  char- 
ity is  "the  vacant  lots  gardens  for  the  unem- 
ployed "  so  successful  in  Philadelphia  and  else- 
where. The  Report  of  the  Philadelphia  com- 
mittee is,  as  Horace  Greeley  used  to  say, 
"mighty  intei'estin'  readin'. "  The  Salvation 
Army  colonization  schemes  also  point  towards 
the  true  remedy  for  poverty. 

The  classification  of  "  cases  "  in  the  annual 
reports  of  "the  Association  for  Improving  the 
Condition  of  the  Poor"  of  New  York  shows 
that  of  all  nationalities  and  conditions  of  those 
needing  relief,  the  largest  number  are  whitej 
married  and  Americans.  Nearly  half  of  them 
"needing  work  rather  than  relief."  You  can 
get  the  Report  for  a  postage  stamp. 

All  statistics  of  charitable  organizations  show 
that  the  real  trouble  with  the  great  majority  of 
the  people  who  seek  relief  is  lack  of  work.  At 
least  75  per  cent,  of  those  who  are  assisted  by 
private  charity  or  public  institutions  are  able  and 


177  MONEY   MAKING 

IN   FREE   AMERICA 

willing  to  work,  if  only  they  could  find  employ- 
ment.* And  the  remaining  25  per  cent.,  includ- 
ing the  children,  the  sick,  etc.,  is  indirectly  the 
result  of  the  same  conditions  of  lack  of  work  or 
low  wages.  Because  of  inability  on  the  part  of 
parents  to  make  provision  for  their  childrei),  the 
orphan  asylums  and  industrial  homes  are  over- 
flowing. Because  of  distress  brought  on  by  in- 
sufficient nourishment,  or  by  living  in  unhealthy 
tenements,  the  hospitals  are  crowded.  Because 
the  sick  are  poor  they  must  look  for  free  medical 

* "  I  have  had  a  long  and  intimate  personal  experience  with 
the  class  of  men  referred  to,  and  I  give  it  unhesitatingly  as  my 
testimony  that  not  many  men  are  '  lazy '  in  the  sense  in  which 
this  word  is  commonly  used.  I  have  dealt  with  thousands  of 
such  men  and  have  almost  invariably  found  them  willing  and 
anxious  to  work.  I  know  that  a  great  many  people  engaged  in 
charitable  enterprises  have  much  to  say  about  lazy  people,  but 
I  am  inclined  to  think  that  it  is  not  so  much  laziness  that  is  at 
fault  as  the  efforts  so  many  of  us  make  to  put  square  pegs  in 
round  holes.  All  men  are  not  born  with  the  same  energy  and 
the  same  intelligence,  and  what  might  be  called  laziness  in  me 
might  be  called  superhuman  energy  in  other  men.  In  this  insti- 
tution, we  do  not  put  at  chopping  wood  or  shoveling  coal,  if 
we  can  possibly  help  it,  the  man  whose  only  occupation  in  life 
has  been  that  of  bookkeeper  or  clerk  and  who  has  never  had 
any  hard  physical  labor.  We  endeavor,  as  far  as  possible,  to 
put  men  at  the  work  they  are  best  fitted  for.  Perhaps  this  is 
one  reason  why  our  experience  leads  us  not  to  consider  laziness 
as  prevalent  a  vice  as  some  other  people." — ^Arthur  W.  Milbury, 
Secretary  Industrial  Christian  Alliance. 


MONEY   MAKING 
IN    FREE    AMERICA 


178 


attendance  instead  of  employing  a  physician. 
So  with  practically  all  the  objects  of  charity. 
Directly  or  indirectly  the  need  for  help  arises 
from  the  fact  that  workers  are  not  able  to  sup- 
port themselves  by  their  labor. 

Professor  Amos  G.  Warner  says :  "  The  causes 
grouped  under  the  heading  'JMatters  of  Em- 
ployment' (being  lack  of  employment,  insuffi- 
cient employment,  poorly  paid  employment,  un- 
healthy or  dangerous  employment) ,  account  for 
somewhat  more  than  one-third  of  the  destitution 
dealt  with  by  the  American  Societies  in  five  lead- 
ing cities.  {American  Charities/  p.  39.)  We 
may  remark,  however,  that  the  remaining  two- 
thirds  are  accounted  for  as  follows:  (Table  p. 
44,  supra.) 

Drink.  j  Grouped     as     '  causes     indicating 

misconduct.' 
Immorality.  I   About   one-quarter   of   the   whole 

number     (the     estimates     vary 
Laziness.  from  about  7   per  cent,  to   35 

)       per  cent.). 


Shiftlessness    and 
Inefficiency. 


'  In  no  nationality  does  the  num- 
ber due  to  these  causes  reach 
one-third  of  the  total.'  (P. 
47.) 


179  MONEY   MAKIlSrG 

IN    FREE    AMERICA 

Those  who  have  worked  the  hardest  at  chari- 
ties know  how  hopelessly  inefficient  and  insuffi- 
cient they  are.  \  Charity  fails,  and  alwaj^s  must 
fail  to  accomplish  its  aims,  because  it  concerns 
itself  with  surface  s^ptoms  and  not  with 
fundamental  causes. 

Since  charity  cannot  stop  anyone  from  shut- 
ting people  out  of  work,  it  cannot  do  anything 
to  alleviate  or  abolish  the  evils  arising  from  want 
of  work.  When  it  pretends  to  do  so,  it  is  a 
fraud  used  to  soothe  the  victims  of  partisan  laws 
into  silence. 

The  rich  generally  Teel  all  this — so  they 
charge  their  own  indifference  to  their  God,  and 
say  that  Jesus  said  "  The  poor  ye  shall  have  al- 
ways with  you."  Jesus  never  said  anything  of  \ 
the  sort.  He  said,  "  The  poox  ye  have  with  you 
always,  and  whensoever  ye  will  ye  may  do  them 
good"  (Mark  14:7) ;  that  is,  may  abolish  theii* 
poverty  and  the  causes  of  it  too.  I  commend 
to  those  persons  the  last  four  verses  of  Reve- 
lation. 

But  they  are  like  us,  they  know  no  better. 
The  rich  are  not  wicked,  or  worse  than  the  poor. 


MONEY   MAKING  180 

IN    FREE    AMERICA 

The  same  flesh  follows  the  same  motives.  Would 
you  become  bad  if  a  rich  cousin  left  you  a  mil- 
lion or  if  you  had  made  money  in  your  little 
speculation  instead  of  losing  it?  If  you  had 
bought  United  Verde  Copper  before  1890  at  a 
dollar  a  share  and  were  getting  dividends  of  ten 
per  cent,  a  month  on  par,  would  it  have  made 
you  malicious? 

Of  course  not.  I  suppose  that  I  know  inti- 
mately more  rich  persons  than  most  men  do,  and 
I  find  them  just  as  honorable  and  affectionate 
as  the  poor.  The  rich  have  their  vices  and 
virtues,  and  the  poor  have  the  same,  only  dif- 
ferently applied. 

Most  people  have  a  misty  idea  that  they  are 
doing  good  with  their  charities,  but  there  is  a 
special  reason  why  we  should  realize  that  charity 
is  a  failure,  in  so  far  as  it  attempts  to  diminish 
poverty.  When  the  miserable  state  of  people  is 
pointed  to  as  a  reason  for  changing  our  present 
social  system,  the  defenders  of  things  as  they 
now  exist  reply,  "  Look  at  what  the  charities  are 
doing  for  these  people."  And  in  this  way  the 
work  of  the  charitable  is  used  to  bolster  up  a 


181  MONEY   MAKING 

IN    FREE    AMERICA 

state  of  affairs  which  is  rapidly  becoming  in- 
tolerable. If  you  are  one  of  those  who  think 
that  uplifting  the  lowest  strata  of  society 
through  charity  will  raise  the  whole  structure, 
you  should  consider  carefully  whether  you  are 
really  accomplishing  anything.  Are  you  not 
sparing  yourself  the  disagreeable  task,  which 
must  some  day  be  done,  of  getting  to  the  bottom 
of  the  question?  Are  you  not  dodging  the  issue 
whether  the  continually  increasing  weight  of  the 
dependent  classes  will  not  pull  down  the  self- 
respecting  independent  workers,  out  of  whose 
toil  the  charity-aided  are  supported? 

CHARITY 
(By  Charlotte  Perkins  Gilmari) 

Came  two  young  children  to  their  mother's  shelf 

(One  was  quite  little  and  the  other  big), 
And  each  in  freedom  calmly  helped  himself 

(One  was  a  pig). 
The  food  was  free  and  plenty  for  them  both, 

But  one  was  rather  dull  and  very  small. 
So  the  big,  smarter  brother,  nothing  loath. 

He  took  it  all. 
At  which  the  little  fellow  raised  a  yell 

Which  tired  the  other's  more  esthetic  ears ; 


MONEY   MAKING  162 

IN   FREE   AMERICA 

He  gave  him  a  crust  and  then  a  shell 

To  stop  his  tears. 
He  gave  with  pride,  in  manner  calm  and  bland 

Finding  the  other's  hunger  a  delight; 
He  gave  with  piety — his  full  left  hand 

Hid  from  his  right. 
He  gave  and  gave;  Oh,  blessed  Charity. 

How  sweet  and  beautiful  a  thing  it  is ! 
How  fine  to  see  that  big  boy  giving  free 

What  is  not  his! 


CHAPTER  XIII 

TEMPERANCE 

TF  you  have  thought  that  temperance,  or 
-■-  prohibition  of  the  Hquor  traffic,  is  the  true 
remedy  for  hard  times,  here  are  some  facts  to 
think  over.  The  great  difficulties  in  the  way  of 
a  national  prohibitory  law  need  not  be  dwelt 
upon,  though  the  Cyclopedia  of  Temperance 
says  that  nothing  less  will  serve.  Let  us  suppose 
that  the  country  has  enacted  laws  to  wipe  out 
the  sale  of  intoxicating  liquors.    What  then? 

Is  it  true  that  supplying  the  new  needs  of 
workers  redeemed  from  drink  by  temperance 
would  bring  prosperity?  That  is  as  it  ought  to 
be,  not  as  we  have  made  it.  Production  of 
goods  requires  laborers  and  a  demand  for  what 
they  make.  The  hosts  of  poverty-stricken  work- 
ers show  that  we  have  goods  and  needs  in  abund- 
ance ;  but  it  requires  also  places  where  these  men 
may  profitably  work.  It  does  not  pay  to  work 
a  farm  forty  miles  from  a  railroad;  nor  does 
it  pay  to   manufacture  on   a  high-priced  site. 

183 


MONEY  MAKING  164 

IN    FREE    AMERICA 

The  opportunities  for  labor  are  restricted  by  the 
high  rent  or  high  prices  of  land,  mines,  timber, 
and  the  other  resources  of  nature.  This,  on  one 
hand,  prevents  the  making  of  clothes  and  food 
and  other  necessities  by  those  now  idle,  and  on 
the  other  hand  it  diminishes  the  capacity  of  the 
workers,  whether  they  be  temperate  or  drunken, 
to  pay  for  these  necessities. 

The  "drink  bill"  of  the  United  States  is 
claimed  by  the  prohibitionists  to  be  fifteen 
hundred  millions  of  dollars  annually.  This  is  a 
liberal  estimate.  But  as  in  addition  to  licenses, 
the  excise  tax  on  a  quart  of  alcohol  which  costs 
about  15  cents  to  produce  is  $1.10,  only  a  frac- 
tion of  this  "bill"  is  for  drink;  the  rest  is  for 
rents,  profits,  taxes,  and  profits  on  the  various 
taxes. 

But  if  it  were  two  thousand  millions  and  the 
expenses  of  the  community  due  to  intemperance 
were  another  thousand  millions,  to  save  all  this, 
as  things  are,  would  increase  "  over-production  " 
and  still  further  increase  land  values,  land  specu- 
lation and  rents. 

As  the  late  Professor  Thorold  Rogers  says: 


18A  MONEV  MAKING 

IN    FREE    AMERICA 

"  Every  betterment  of  the  general  condition  of 
society,  every  facility  given  for  production, 
every  stimulus  applied  to  consumption,  raises 
rent." 

The  Rev.  J.  C.  Fernald,  the  author  of  "  Eco- 
nomics of  Prohibition,"  rightly  says  that  "  absti- 
nence brings  new  demands."  It  can  bring  new 
expenditures  only  if  someone  will  "  give  "  the 
reformed  men  work;  this  the  "  lords  of  the  land  " 
will  do  solely  on  condition  that  the  average  re- 
formed men  pay,  directly  or  indirectly,  all  that 
they  get  over  a  mere  living.  If  they  save  by  not 
buying  rum  they  can  now  live  on  less  than  they 
did  before,  and  there  being  more  men  than  there 
are  places,  they  can  and  must  eventually  bid 
lower  than  before  to  get  the  work. 

Under  present  conditions,  to  reform  the  large 
part  of  our  community,  who,  because  of  drink, 
are  more  or  less  incapable  of  work,  would 
greatly  increase  the  number  of  laborers,  and  by 
increasing  competition,  would  reduce  wages. 
For  the  rate  of  wages  is  fixed  by  the  number 
of  unemployed  who  are  forced  to  compete  for 
work  and  bid  against  each  other,  each  offering 


MONEY   MAKING  186 

IN    FREE    AMERICA 

to  do  the  job  a  little  lower  than  the  man  who, 
for  the  moment,  has  the  job. 

If  all  men  were  temperate,  they  would  be  able 
to  live  cheaper  than  they  do  now,  as  the  waste 
on  liquor  would  be  stopped.  Well!  men  bid  for 
whatever  jobs  are  to  be  had,  and  the  lowest  pay 
for  which  each  one  will  offer  to  work  is  limited 
only  by  the  lowest  sum  upon  which  he  can  live. 

For  where  all  the  resources  of  nature  are 
owned,  competition  for  the  use  of  them  will 
bring  wages  down.  The  laborer  will  not  get 
more  than  what  he  would  earn  working  on  what- 
ever land  he  can  get  rent  free.  Rather  than 
starve,  he  will  work  for  the  least  sum  he  can  live 
upon — competition  in  an  overcrowded  labor 
market  tends  to  force  his  wages  down  to  a  bare 
living.  "  It  is  not  merely  the  number  of  workers 
that  determine  wages,  but  what  there  is  to  do." 
If  the  resources  of  nature  be  locked  up  by  the 
"owners,"  with  what  or  on  what  shall  laboring 
men  do  anything?  Nature  made  man  to  depend 
upon  the  earth  for  work  and  bread.  We  have 
made  him  to  depend  on  an  "  employer "  or  a 
land  "  owner." 


187  MONEY   MAKING 

IN   FREE    AMERICA 

If  the  problem  of  the  unemployed  could  be 
solved  by  increased  desires  or  by  raising  the 
standard  of  living,  then  the  Chinese  immigration 
problem  could  be  solved  by  teaching  the  "de- 
graded Oriental "  to  drink  mint  juleps  and 
smoke  ten-cent  cigars. 

It  is  true  that  the  temperate  men  would  be 
ready  to  consume  more  as  well  as  produce  more. 
What  good  would  that  be  to  them  if  the  places 
from  which  they  can  produce  are  shut  up  from 
them  by  their  owners?  Their  increased  con- 
sumption will  only  raise  prices  and  their  in- 
creased capacity  for  production  will  mainly  raise 
the  value  of  land. 

That  the  farmers  in  Dakota  burn  their  corn 
to  keep  from  freezing,  while  the  Pennsylvania 
miners  starve,  cannot  be  due  to  intemperance; 
it  is  due  to  limitation  of  the  amount  that  can 
be  earned.  This  limitation  is  caused  by  the  land- 
lord and  land  speculator,  who  say:  "You  shall 
not  work  on  our  land  unless  you  pay  our  price. 
You  miners  starve,  yet  you  may  dig  only  so 
much  coal  as  will  keep  the  price  at  $6  a  ton.  It 
is  true  that  were  we  to  let  you  dig  all  you  want. 


MONEY   MAKING  189 

IN    FREE    AMERICA 

you  could  exchange  it  with  the  shivering  farmer 
for  his  wasted  corn,  but  then  the  price  would  fall 
and  the  company  would  make  less  money  selling 
much  at  low  prices  than  it  made  selling  little  at 
high  prices."  So  the  miner  cannot  buy  corn  nor 
the  farmer  get  coal.  How  would  it  cure  that  to 
turn  some  of  the  corn  into  bread  instead  of  into 
the  less  useful  liquor? 

It  is  true  that  to  abolish  the  enormous  ex- 
penses of  crime  and  pauperism  immediately 
traceable  to  drink  would  decrease  the  taxes  and 
increase  security  of  property  and  person.  But 
that  would  lighten  the  cost  of  keeping  land  idle, 
would  raise  rents,  stimulate  speculation  and  in- 
crease the  amount  of  land  held  out  of  use  or 
only  partly  used.  Accordingly,  it  would  still 
further  restrict  the  opportunities  for  work. 

Intemperance  is  as  often  the  result  of  idle- 
ness as  its  cause.  It  is  true  that  the  bottle  leads 
to  sickness  and  shiftlessness,  to  poverty  and 
crime.  Do  not  these  often  lead  to  the  bottle? 
Drink  is  the  symptom  of  the  social  disease;  to 
suppress  that  symptom  without  noticing  the 
causes    which   always    aggravate,    which    often 


189  MONEY   MAKING 

IN    FREE    AMERICA 

produce  it,  would  still  further  "  bring  up  pro- 
duction beyond  consumption  and  overstock  the 
labor  market." 

General  Booth,  of  the  Salvation  Army,  reports 
that  not  over  fourteen  per  cent,  of  the  cases  of 
pauperism  in  England  are  due  to  drink.  The 
Association  for  Improving  the  Condition  of  the 
Poor  and  the  Charity  Organization  Society  of 
New  York  make  about  the  same  estimate.  (See 
their  Reports.*) 

Temperance  in  drink  or  total  abstinence  could 
not  cure  the  evils  of  our  civilization  except  as 
they  tend  to  make  men  more  intelligent  so  as  to 
think  out  what  the  matter  really  is,  and  to  pre- 
vent men  stupefying  themselves  as  a  relief  from 
the  pangs  of  j)overty,  instead  of  rebelling  against 
poverty  and  its  causes. 

But  suppose  temperance  would  help;  to  at- 
tack intemperance  alone  is  hopeless.    The  saloon 

* "  Probably  nothing  in  the  tables  of  the  causes  of  poverty, 
as  ascertained  by  case  counting,  will  more  surprise  the  average 
reader  than  the  fact  that  intemperance  is  held  to  be  the  chief 
cause  in  only  one-fifteenth  to  one-fifth  of  the  cases,  and  that 
where  an  attempt  is  made  to  learn  in  how  many  cases  it  had 
contributory  influence,  its  presence  cannot  be  traced  at  all  in 
more  than  twenty-eight  and  one-tenth  in  the  hundred  of  all  the 
cases." — Prof,  Amos  G,  Warner,  American  Charities,  p.  60. 


MONEY    MAKING  190 

IN    FREE    AMERICA 

is  the  workingman's  club,  where  the  dues  are  but 
five  cents  an  evening;  where  there  is  Hght,  heat, 
papers  and  companionship,  and  where  he  can 
find  refuge  from  his  lonehness  or  from  the 
steaming  room  with  bad  hght,  fretting  children 
and  all  the  discomforts  of  home.  Suppose  you 
were  to  come  home  tired  to  a  close  tenement 
room,  where  the  washing  was  still  going  on,  with 
the  children  crying,  the  smell  of  cooking  and  the 
feeble  light  of  one  kerosene  lamp  with  which 
to  read,  you  would  look  with  longing  eyes  at 
the  cheerful  light  and  the  bright  doors  of  the 
corner  beer  shop. 

Half  the  drinking  is  due  to  lack  of  mental 
resources,  idleness,  over-strain,  or  to  the  desire 
to  escape  from  wretchedness,  at  least  for  a  time. 
As  the  Bible  says :  "  Give  strong  drink  unto  him 
that  is  ready  to  perish,  and  wine  unto  those  that 
be  of  heavy  hearts.  Let  him  drink  and  forget 
his  poverty  and  remember  his  misery  no  more." 
— Prov.  31:  6-7. 

Much  of  it  is  due  to  the  social  habit  of  "  treat- 
ing" which  would  never  have  existed  if  drink 


191  MONEY   MAKING 

IN    FREE    AMERICA 

did  not  cost  ten  times  what  it  ought  to  cost,  by 
reason  of  the  internal  revenue  and  license  taxes. 
Who  would  invite  a  man  to  a  "  treat,"  price  one 
cent? 

A  great  deal  is  due  to  those  restrictions  which 
make  the  business  very  profitable  to  a  few,  who 
get  the  benefit  of  our  laws.  A  saloonkeeper, 
in  order  to  sell  a  drink,  furnishes  free  lunch,  hot 
suppers,  a  reading-room  and  practically  all  the 
advantages  of  a  club.  Did  you  ever  find  a  man 
who  sold  milk  doing  that?  It  would  not  pay. 
Why  not?  Because  competition  has  cut  down 
the  price  of  milk.  Why  has  it  not  cut  down  the 
prices  on  liquor?  Because,  notwithstanding  the 
number  engaged  in  the  business,  there  is  a  mo- 
nopoly, a  special  privilege,  and  a  ring  founded 
on  those  things,  which  multiply  the  profits. 

A  leading  prohibitionist  in  Georgetown,  Del., 
once  said  to  me:  "  Oh,  if  you  squeeze  the  profit 
out  of  the  liquor  monopoly,  the  business  will  fall 
of  itself." 

Sixty-five  years'  valiant  efforts,  leaving  them 
little  further  forward  than  at  the  beginning, 


MONEY   MAKING  193 

IN   FREE    AMERICA 

ought  to  make  the  earnest  and  courageous  prohi- 
bitionists suspect  that  there  is  something  wrong 
in  their  theory  of  the  cause  of  drinking. 

All  this  is  not  to  decry  temperance,  a  most 
important  one  of  many  excellent  reforms:  it  is 
only  to  show  that  we  must  not  look  to  temper- 
ance, any  more  than  to  White  Cross  work,  for  a 
solution  of  our  social  problem,  or  for  a  plan  to 
enable  us  all  to  thrive. 


CHAPTER   XIV 

MONEY    REFORM 

THE  money  question  is  regarded  by  millions 
of  the  American  people  as  the  chief  eco- 
nomic issue. 

You  have  heard  a  great  deal  in  past  years 
about  it;  you  know  all  about  the  scarcity  of 
money  and  about  the  banking  privilege ;  perhaps 
you  have  concluded  that  to  have  more  money  in 
the  country  would  somehow  make  you  rich.  Let 
us  see  what  there  is  in  all  this  talk  about  money. 

Because  money  represents  wealth,  or  can  most 
easily  be  exchanged  for  it,  it  is  believed  that  the 
ownership  or  control  of  the  currency  of  the 
country  is  the  means  by  which  the  wealth  pro- 
ducers are  robbed.  Out  of  this  idea  has  arisen 
a  school  of  reformers  who  think  that  the  unfair 
distribution  of  wealth  can  be  cured  by  changes 
in  our  system  of  issuing  money.  Though  money 
in  its  true  sense  is  not  property,  but  merely  a 
means  of  exchanging  the  various  kinds  of  prop- 

193 


MONEY   MAKING  194 

IN    FREE    AMERICA 

erty  and  measuring  their  value,  these  men  unite 
in  demanding  that  the  government  shall  increase 
the  stock  of  money  in  the  country.  Some  have 
advocated  the  free  and  unlimited  coinage  of 
silver  at  the  present  legal  ratio;  that  is,  that  the 
government  shall  stamp  "  one  dollar  "  on  every 
STlJ  grains  of  silver  brought  to  the  mint.  Other 
money  reformers  advocate  the  issue  of  irredeem- 
able greenbacks  in  amounts  varying  from  $1,- 
000,000,000  to  $3,500,000,000,  or  of  $50  per 
capita.  Still  another  class  favors  what  is  known 
as  the  sub-treasury  plan  of  supplying  money. 
The  main  feature  of  this  scheme  is  to  establish 
in  the  principal  cities  government  warehouses  in 
which  staple  farm  products  are  to  be  stored  and 
currency  certificates  issued  to  two-thirds  of  their 
value. 

Differing  thus  as  to  the  system  which  should 
be  established,  the  advocates  of  the  various  plans 
for  currency  reform  are  agreed  that  more  money 
is  needed,  and  that  it  is  the  business  of  the  gov- 
ernment to  supply  it. 

In  dealing  with  the  doctrine  that  more  money 
means  more  wealth,  and  its  resulting  belief  that 


195  MONEY    MAKING 

IN    FREE    AMERICA 

government  can  create  wealth  by  law,  we  must 
first  consider  whether  the  complaint  that  our 
mone}^  supply  is  now  controlled  by  a  monopoly 
is  true.  And  on  this  point  it  is  evident  that  the 
people  who  complain  of  an  insufficient  currency 
have  good  reason  for  demanding  a  change. 
"  When  the  people  complain,  they  are  alwaj'-s 
right" — in  the  complaint.  Our  present  hodge- 
podge system  of  gold  and  silver  coins,  green- 
backs, silver  certificates,  treasury  notes,  and  na- 
tional bank  notes  is  certainly  verj^  bad  and  in 
urgent  need  of  radical  changes.  The  national- 
bank  system  of  issuing  currency  was  a  war 
measure,  and  has  long  outlived  its  usefulness. 
Its  note  issues  are  costly  and  inelastic,  involving 
the  purchase  of  government  bonds,  and  limiting 
the  volume  of  notes  to  that  of  the  bonds  out- 
standing. The  restrictions  on  the  formation  of 
new  national  banks  and  the  law  requiring  that 
each  national  bank  shall  have  a  capital  of  not 
less  than  $25,000  or  $50,000,  render  their  organi- 
zation in  country  towns  diflicult.  State  banks 
might  be  formed  in  such  towns;  but  national 
banks  have  practically  exclusive  power  of  issuing 


MONEY    MAKING  196 

IN   FREE   AMERICA 

currency,  as  the  law  imposes  a  tax  of  ten  per 
cent,  on  all  notes  circulated  by  other  banks. 
There  is  therefore  some  monopoly  in  our  money 
supply. 

These  are  the  starting  points  of  the  "cheap 
money"  agitation,  which  brought  the  "money 
question"  into  politics.  That  the  govern- 
ment coins  gold  and  silver  and  makes  it  a  legal 
tender  for  all  debts,  sets  the  government's  seal 
on  the  material  which  has  already  been  selected 
by  commerce  as  the  best  standard  for  measuring 
values.  That  in  evolution  of  money  from  its 
primitive  forms  of  skins,  shells  or  masses  of 
iron  or  copper  up  to  the  coins  of  the  present  day, 
gold  should  have  come  to  be  used  by  all  the 
leading  commercial  nations,  tends  to  show  that 
it  is  the  superior  substance  for  use  as  money. 
Gold  is  not  a  perfect  money  standard,  but  it  is 
the  best  so  far  generally  agreed  upon. 

While  thus  leaving  the  question  of  the  stand- 
ards as  of  comparatively  little  importance,  it 
may  be  admitted  that  free  coinage  of  gold  and 
making  gold  a  legal  tender  for  all  debts,  and 
thus  by  law  constituting  it  the  sole  standard  of 


197  MONEY    MAKING 

IN    FREE    AMERICA 

payments,  is  a  violation  of  equal  rights.  If,  as 
is  claimed  by  all  advocates  of  the  gold  standard, 
the  government  stamp  is  not  necessary  in  order 
to  induce  the  use  of  gold  as  money,  there  can 
be  no  objection  to  the  proposal,  made  by  promi- 
nent defenders  of  gold  as  a  measure  of  value, 
to  abolish  the  legal  tender  quality  of  gold  coin. 
This  would  not  influence  any  real  superiority  of 
gold  for  the  purposes  for  which  money  is  needed. 
If  it  be  true  that  gold  stands  on  its  own  merits, 
it  certainly  does  not  need  the  support  of  legisla- 
tion. 

Some  elements  of  monopoly  are  seen  in  our 
present  system  of  banking.  Because  of  this, 
large  numbers  of  persons  denounce  banks  of  all 
kinds  as  dangerous,  and  demand  that  the  power 
to  issue  currency  should  be  taken  from  the  banks 
altogether.  This  is  the  same  mistake  that  it 
would  be  to  ask  that,  because  some  corporations 
were  enabled  by  special  legislation  to  combine 
and  raise  prices,  therefore  all  corporations 
should  be  prohibited  from  making  goods.  The 
real  remedy,  of  course,  would  be  to  abolish  the 
laws  which  enabled  the  factories  to  shut  out  com- 


MONEY    MAKIXU  198 

IN    FREE    AMERICA 

petition.  And  exactly  the  same  is  true  of  the 
banks.  Banks  are  as  useful  institutions  as  stores 
or  factories,  and  should  be  so  organized  as  to  be 
in  the  interest  of  the  public.  A  free  banking 
system  would  be  forced  by  competition  to  pro- 
vide insurance  and  other  safeguards  for  itself. 
Privileged  banks  are  bad,  but  that  is  no  reason 
why  a  good  banking  system  should  not  be  es- 
tablished. In  some  countries,  notably  Scotland, 
France  and  Canada,  mutual  banks  are  already  in 
existence,  and  are  looked  on  by  the  people  as 
their  friends,  instead  of  as  enemies  of  the  com- 
monwealth. 

The  easy  way  to  solve  the  currency  problems 
which  now  vex  us,  is  through  the  repeal  of  the 
restrictive  laws  and  the  general  establishment  of 
mutual  banks  by  the  people,  through  which  all 
can  secure  the  benefits  now  obtained  by  a  limited 
number.  There  is  no  reason  why  banking  cor- 
porations, which  are  only  unions  of  private 
individuals,  should  not  be  formed  wherever  any 
number  of  persons  can  be  found  who  have  some 
spare  capital.  The  repeal  of  the  ten  per  cent, 
tax  which  is  now  imposed  on  all  bank  currency 


199  MONEY   MAKING 

IN    FREE    AMERICA 

except  that  of  national  banks,  is  a  reform  which 
is  urgently  required  and  would  be  the  first  step 
to  monetary  emancipation.  It  will  allow  a  sound 
and  elastic  currency,  redeemable  on  demand  in 
coin,  but  not  limited  by  the  amount  of  gold  or 
silver  in  the  country,  to  be  issued  by  such  mutual 
banks.  This  would  put  an  end  to  money  mo- 
nopoly, whether  of  "  gold  barons,"  silver  mine 
owners,  or  national  bankers.  It  would  facilitate 
the  organization  of  a  better  and  safer  credit 
system,  would  lower  interest,  and  would  put 
an  end  to  the  agitation  for  issues  of  government 
money. 

Many  persons  are  troubled  on  account  of  the 
cumulative  amount  of  interest:  they  think  that 
"  interest  is  the  robbery  of  labor."  Under  even 
a  partial  monopoly  of  money  it  may  be;  but  if 
anyone  can  get  for  a  loan  more  than  a  fair  share 
of  the  benefit  that  labor  gets  from  the  use  of 
money,  it  must  be  because  he  has  an  exclusive 
control  of  money.  It  seems  self-evident  that 
under  free  conditions  no  one  will  pay  more  for 
the  use  of  money  than  it  is  worth  to  him. 

In  the  meantime,  under  present  conditions, 


iMONEY   MAKING  300 

IN    FREE    AMERICA 

interest  forms  a  kind  of  balance  wheel  to  decide 
when  people  shall  save  and  when  they  shall  con- 
sume. When  interest  is  high,  people  tend  to 
2)iit  their  savings  in  the  banks  or  to  invest  it 
themselves  to  get  the  high  rates.  When  interest 
is  low  people  spend  the  money  because  it  brings 
so  little  income.  "  What  is  the  use  of  saving  it?  " 
they  say,  "you  can't  get  over  2 J  per  cent, 
for  it." 

The  same  is  true  of  the  money-making  busi- 
ness man.  If  he  sees  that  he  can  make  a  profit, 
he  will  build  an  extension  to  his  store — if  he 
can't,  he  may  buy  an  auto. 

Undue  interest  depends  upon  an  undue  cen- 
tralization of  money  or  of  the  representative  of 
money,  as  much  as  upon  any  scarcity  of  it. 

As  one  remedy  for  the  scarcity  of  money,  the 
"  Labor  Exchange  "  is  offered.  This  is  a  plan 
of  co-operation  by  which  persons  put  merchan- 
dise or  land,  which  they  are  unable  to  sell,  into 
a  common  stock,  at  a  valuation  made  by  a  com- 
mittee. Against  this  property,  certificates  are 
issued  which  are  receivable  at  a  depot  in  ex- 
change for  any  goods  in  stock.  Being  negoti- 
able at  the  exchange  stores  for  a  variety  of 


gOl  MONEY   MAKING 

IN   FREE    AMERICA 

things,  the  certificates  are  accepted,  more  or  less 
freely,  by  merchants  in  payment  for  their  goods. 
As  it  grows,  the  Exchange  accepts  more  goods, 
and  may  produce  any  kind  of  goods  which  is 
considered  desirable.  This  plan  is  in  active  and 
successful  operation  in  a  number  of  places,  and 
has  worked  well.  There  has  been  an  attempt  to 
impose  the  State  bank  currency  tax  of  ten  per 
cent,  upon  these  certificates,  under  the  claim  that 
they  are  money,  as  in  fact  they  are,  but  so  far 
it  has  happily  been  unsuccessful.  The  Labor 
Exchange  is  a  good  illustration  of  how  the  un- 
fettered action  of  individuals  will  solve  economic 
problems  automatically. 

But  as  it  is  of  little  service  for  men  to  have  a 
medium  of  exchange  unless  they  have  the  land 
from  which  to  produce  the  exchangeable  things, 
this  is  not  a  remedy  for  the  underlying  social 
disease.  It  is  claimed  that  such  certificates,  being 
exchangeable  for  land,  as  well  as  for  products 
of  labor,  will  enable  the  holders  to  buy  land. 
If  so,  it  will  enable  them  to  speculate  in  it  also, 
and  hold  it  out  of  use,  further  increasing  its 
price  and  making  it  still  more  difficult  for  others 
to  use  it.    No  matter  how  many  exchanges  were 


MONEY    MAKING  202 

IN    FREE    AMERICA 

organized  to  give  certificates  in  exchange  for 
labor,  the  witliliolders  of  the  opportunities  for 
labor  would  say,  just  as  they  do  now:  "No; 
we  do  not  want  our  mines  worked,  we  do  not 
care  to  sell  that  land — we  have  no  use  for  your 
labor ;  but,  if  you  must  work  or  else  be  supported 
out  of  taxes,  why,  work,  but  the  most  of  you 
will  have  to  give  us  all  the  results  of  it  over  a 
bare  living  for  the  privilege  of  using  our  land." 
Given  a  few  men  who  own  the  land  on  which 
all  mankind  must  live  and  work;  given  a  few 
men  who  own  all  the  valuable  public  franchises, 
given  a  few  men  who  have  enormous  special 
privileges,  and  it  makes  no  difference  how  much 
money  there  is  in  the  country,  or  how  it  is  fur- 
nished. Under  conditions  which  will  allow  every 
man  freely  to  produce  wealth  and  freely  to  ex- 
change it,  a  system  of  free  banking  will  contrib- 
ute greatly  to  the  prosperity  of  the  whole  people. 
The  money  question,  like  all  other  problems  of 
the  time,  is  to  be  solved  by  more  freedom  and  not 
by  more  interference.* 

*  A  good  book  to  read  on  the  questions  of  money  and  banking 
is  "The  Natural  Law  of  Money,"  by  William  Brough.  G.  P. 
Putnam's  Sons. 


203  MONEY   MAKING 

IN   FREE    AMERICA 

Five  men  were  playing  poker.  Their  chips 
were  white,  red  and  blue,  the  white  chips  repre- 
senting five  cents;  the  reds  ten  cents,  and  the 
blue  half  a  dollar.  The  game  had  not  gone  very 
far  when  it  was  noticed  that  one  man  was 
steadily  raking  in  the  pots.  The  other  gamblers 
played  'em  up  close  and  drew  as  carefully  as 
they  knew  how,  but  it  was  no  use.  At  dinner 
time  the  lucky  player  had  all  the  chips. 

After  the  winner  had  cashed  in  and  left  the 
room  one  of  the  losers  happened  to  look  over  the 
cards  which  they  had  been  using,  when  he  noticed 
some  curious  specks  on  their  backs.  "  Boys,"  he 
said,  "  we've  been  up  agin  a  sharp.  Them  cards 
is  marked."  And  an  examination  showed  that 
all  the  cards  were  "  crooked." 

One  of  the  losers  said:  "  I've  got  a  scheme  by 
which  we  can  get  our  money  back.  Let's  invite 
that  crook  to  play  with  us  again  after  dinner, 
and  we'll  change  these  chips  and  get  more  new 
ones.  We'll  call  both  whites  and  reds  ten  cents, 
and  blues  a  dollar.  Then  there  will  be  more  to 
win  and  when  we  win  we'll  get  twice  as  much 
money  as  we  would  on  the  old  basis." 


MONEY   MAKING  204 

IN    FREE    AMERICA 

This  was  agreed  to.  The  losers  went  out  and 
borrowed  some  money,  and  after  dinner  the 
game  was  resumed,  the  same  cards  being  used. 
Much  to  their  surprise  the  crook  continued  to 
rake  in  the  chips,  and  in  two  hours  he  had  the 
others  broke  again.  As  he  shoved  the  roll  into 
his  pocket  one  of  them  remarked :  "  Changing 
the  value  of  them  chips  don't  seem  to  have 
changed  our  luck.  Mebbe  we'd  ought  to  have 
changed  the  cards." 

The  producers  of  America  are  playing  in  a 
game  in  which  the  cards  have  been  stacked  by 
those  who  are  winning  all  the  chips.  Suppose  we 
make  the  white  metal  chips  called  fifty  cents 
worth  a  dollar.  Will  that  change  the  luck?  Not 
much.  We  need  a  new  deck  and  a  new  deal;  a 
square  deal  in  which  all  the  players  shall  have  an 
equal  chance.  Then  there  will  be  some  show  for 
the  people  to  win.  As  it  is  now  they  are  bound 
to  lose — gold  chips,  silver  chips,  or  greenback 
I.  O.  U's,  it's  all  the  same  to  the  men  who  stack 
the  cards. 


CHAPTER  XV 

TRADES    UNIONS    AND    THEIR    REMEDIES 

A  MONG  the  workers  who  have  studied 
-^^^  enough  to  see  that  conditions  are  unfair 
to  wealth  producers,  there  is  a  general  belief  that 
relief  can  be  secured  through  trades  unions. 
Organizations  of  workers  in  the  various  occupa- 
tions, such  as  cigarmakers,  carpenters,  or  print- 
ers, have  well-defined  plans  to  increase  the 
opportunities  for  labor  and  thus  raise  the  wages 
of  their  members.  Beginning  with  the  guilds,  or 
associations  of  craftsmen,  in  the  Middle  Ages, 
trades  unions  have  developed  into  large  and 
powerful  organizations,  in  recent  years  becom- 
ing international  in  their  scope  and  having  the 
same  general  aims.  Among  these  are:  regula- 
tion of  hours  of  labor;  restrictions  of  the  number 
of  apprentices;  securing  laws  to  protect  the 
workers  from  injury  while  engaged  in  their  call- 
ings ;  maintenance  of  a  union  rate  of  wages ;  and 
concerted  action  by  all  workmen  against  the  de- 
mands of  employers. 

205 


MONEY    MAKING  306 

IN    FREE    AMERICA 

These  associations  have  been  of  use  to  their 
members  in  securing  privileges  or  rights  of  which 
they  would  otherwise  have  been  deprived.  And 
there  can  be  no  question  as  to  the  benefits  of  the 
educational  work  of  trades  unions  among  work- 
ing men  and  women.  Even  though  the  methods 
by  which  the  unions  enforce,  or  try  to  enforce, 
their  demands  may  sometimes  be  inconsistent 
^vith  individual  liberty,  they  can  be  justified  by 
the  un-American  conditions  into  which  labor  has 
been  forced.  It  is  not  becoming  in  the  men  who 
take  advantage  of  labor,  bound  by  fetters  of 
class  legislation,  to  despoil  it  of  a  large  share  of 
its  products,  to  find  fault  because  trades  unions 
have  not  always  used  mild  methods  in  their  at- 
tempts to  right  their  grievances. 

What  we  have  to  consider  here  is  the  suffi- 
ciency of  the  trades  union  plans  as  a  remedy  for 
low  wages,  scarcity  of  employment,  high  rents, 
and  unequal  distribution  of  wealth.  Take  first 
the  erght-hour  law  proposition.  It  is  claimed 
that  if  nobody  were  allowed  to  work  more  than 
six  or  eight  hours  per  day  there  would  be  far 
more  work,  and  the  idle  men  would  get  em- 


207  MONEY    MAKING 

IN    FREE    AMERICA 

ployment.  There  would  be  more  opportunities 
for  work,  no  doubt,  but  it  would  be  the  kind  of 
opportunities  which  would  be  made  by  breaking 
machines.  Every  fire  makes  more  work  for  the 
building  trades,  but  that  does  not  make  the  de- 
struction of  property  a  good  thing. 

Wages  are  the  share  of  labor's  product  which 
is  left  to  the  workers.  If  labor  produces  less 
working  only  eight  hours,  there  is  a  smaller 
product  to  be  divided  between  employer  and  em- 
ployed, and  it  is  not  the  employer  who  will  suffer 
most  by  the  change.  On  the  other  hand,  if,  as 
is  claimed  by  eight-hour  advocates,  men  working 
eight  hours  do  as  much  as  they  formerly  did  in 
ten  hours,  then  there  will  be  no  increased  de- 
mand for  labor  and  no  relief  to  the  unemployed. 
Both  of  these  contradictory  statements  as  to  the 
working  of  an  eight-hour  law  cannot  be  true. 
And  in  either  case  the  scheme  does  not  go  to  the 
root  of  the  difficulty. 

The  attempt  to  keep  up  wages  by  limiting  the 
number  of  apprentices  is  only  a  makeshift,  for 
the  industrial  schools  now  teach  trades  to  large 
numbers  of  young  men.    Besides,  it  is  a  violation 


MONEY    MAKING  208 

IN    FREE    yVxMERICA 

of  the  American  principle  of  equal  rights  to  say 
to  a  boy:  "You  shall  not  learn  the  blacksmith's, 
the  stonecutter's,  or  any  other  particular  trade." 
'No  man,  or  set  of  men,  has  a  right  to  deny  to 
another  the  opportunity  to  work  at  such  em- 
ployment as  he  sees  fit.  To  assume  to  dictate 
who  shall,  or  shall  not,  become  skilled  in  any 
calling,  is  tyranny  none  the  less  because  it  is 
done  by  men  who  are  themselves  oppressed. 

Trades  unions  have  often  been  successful  in 
maintaining  a  fixed  rate  of  wages  in  some  coun- 
tries or  sections  of  a  country,  and  were  it  not  for 
the  surplus  of  unemployed  labor  they  might 
everywhere  secure  better  terms  from  employers. 
But  as  it  is,  the  union  wage  rate  is  partly  se- 
cured through  the  generally  superior  skill  and 
intelligence  of  the  unionists,  but  mainly  at  the 
expense  of  the  community  or  of  the  non-union- 
ists by  establishing  a  partial  monopoly  in  the 
trade.  But  with  the  flow  of  population  to  the 
cities,  which  has  been  setting  in  for  years,  the 
struggle  against  the  competition  of  non-union 
labor  is  growing  harder  and  harder.  If  the  host 
of  idle  men  ever  eager  to  get  work  at  any  wages 


209  MONEY   MAKING 

IN    FREE    AMERICA 

grows,  it  is  only  a  question  of  time  when  the 
union  wage  rate  must  sink,  and  lower  wages  be 
paid.  So  far,  the  development  of  the  great  areas 
of  land  in  the  West  and  South  and  the  opening 
up  of  new  areas  by  irrigation,  by  better  com- 
munication and  by  new  inventions,  has  helped 
trades  unions  in  their  fight,  making  an  outlet 
for  surplus  labor  and  making  customers  of  those 
who  before  only  competed  for  jobs.  Unless 
radical  changes  are  brought  about  in  our  social 
Bystem  trades  unions  will  be  swamped  sooner 
or  later,  by  the  increase  of  unemployed  skilled 
labor,  glad  to  get  work  for  a  bare  subsistence. 

The  weapon  on  which  trades  unions  have 
chiefly  relied  has  been  the  strike.  No  doubt,  in 
many  cases  strikes  have  been  effective  in  pre- 
venting wage  reductions,  and  even  in  securing 
higher  wages  for  some  employees.  But  in  re- 
cent years,  except  in  "boom"  times,  it  has  be- 
come more  and  more  apparent  that  the  increas- 
ing numbers  of  idle  workers  who  take  the  place 
of  strikers,  make  strikes  of  less  effect  in  the 
struggle  between  employer  and  employed.  Such 
great  strikes  as  those  of  the   Boston  Freight 


MONEY    MAKING  210 

IN    FREE    AMERICA 

Handlers,  the  Lowell,  Mass.,  Cotton-mill  oper- 
atives, and  the  Brooklyn  and  Philadelphia  trol- 
ley lines,  failed  mainly  because  non-union  men 
were  waiting  to  do  the  work  of  the  strikers. 
Trades  unionists  admit  that  the  greatest  obstacle 
to  the  success  of  a  strike  are  the  "  rats "  or 
"scabs,"  as  they  call  non-union  workers  who 
work  for  less  wages  than  the  unionists.  Of 
course  a  "  scab  "  is  a  human  being,  and  often  has 
a  wife  and  children  to  support,  and  he  is  usually 
glad  to  get  a  chance  to  work  on  any  terms. 
Non-unionists  cannot  be  greatly  blamed  for  sup- 
planting the  strikers,  when  it  is  a  question  of 
getting  another  man's  place  or  starving.  In- 
stead of  denouncing  their  mates  as  enemies,  the 
trades  unionists  should  give  more  attention  to 
abolishing  all  that  makes  men  idle.* 

A  tithe  of  the  money  spent  in  strikes,  if  used 
by  the  unions  to  secure  land  on  which  they  could 
work,  would  have  vastly  improved  their  circum- 
stances. The  unions  are  beginning  to  see  this, 
as  is  shown  by  the  farm  that  was  operated  by 
Typographical  Union  No.  6,  of  New  York  City. 

*  Read  "  The  Condition  of  Labor,"  by  Henry  George. 


311  MONEY   MAKING 

IN  FREE   AMERICA 

Something  has  heen  done,  notably  in  Eng- 
land, by  arbitration,  to  settle  the  disputes  be- 
tween laborers  and  employers.  But  the  fatal 
fault  of  arbitration,  whether  by  agreement  or  by 
law,  is  that  it  does  not  include  the  "sleeping 
partner  "  of  laborer  and  employer,  the  owner  of 
the  site  for  work  and  of  the  materials  drawn 
from  that  site.  It  is  not  as  the  employer  but  as 
the  monopolist  that  some  bosses  are  able  to  say 
*'  There  is  nothing  to  arbitrate." 

The  reduction  of  wages  in  order  to  stimulate 
business,  is  a  chimera.  It  would  enable  us  to  sell 
some  goods  abroad  that  we  cannot  sell  now,  but 
on  the  other  hand  it  would  reduce  the  price  paid 
by  the  rich  for  what  they  consume.  But  these 
things  are  mere  drops  in  the  bucket.  It  is  the 
masses  that  consume  goods;  and  the  purchasing 
power  of  the  masses  would  suffer  the  main  re- 
duction. 

In  the  same  way,  to  advance  wages,  though  it 
increases  the  purchasing  power  of  the  wage- 
earner,  will  make  his  cost  of  living  proportion- 
ately higher.  Neither  plan  touches  *'  the  plun- 
derers that  take  all  that  is  left." 


MONEY    MAKING  219 

IN    FREE    AMERICA 

But  while  strikes  and  changes  in  rates  of 
wages  can  do  little  to  bring  about  a  better  distri- 
bution of  wealth,  they  are  legitimate  methods 
of  compelling  employers  to  deal  fairly  with 
their  employees.  Every  man  has  a  right  to  re- 
fuse to  work  for  an  employer,  and  to  advise  and 
urge  other  men  to  quit  work.  These  rights  of 
free  American  citizens  have  in  recent  years  been 
grossly  violated  by  Judges  of  the  State  and 
Federal  courts,  who  without  precedent  or  au- 
thority have  issued  injunctions  forbidding  men 
to  quit  work,  or  to  persuade  other  workers  to 
quit.  This  was  first  done  on  the  ground  that  the 
persons  against  whom  injunctions  were  issued 
were  about  to  engage  in  rioting  and  other  un- 
lawful acts,  and  in  a  number  of  cases,  beginning 
about  the  time  of  Eugene  V.  Debs  and  his  asso- 
ciates of  the  American  Railway  Union,  men 
have  been  arrested  and  imprisoned  for  contempt 
of  court  because  they  refused  to  obey  the  orders 
of  some  judicial  servant  of  monopol^^  In  the 
great  strike  of  coal  miners  in  1902  some  judges 
went  still  further  and  issued  "blanket"  injunc- 
tions forbidding  the  strikers  from  holding  peace- 


213  MONEY   MAKING 

IN    FREE    AMERICA 

ful  meetings,  marching  on  the  public  highways, 
or  in  any  way,  peaceable  or  otherwise,  interfer- 
ing with  the  men  who  took  the  places  of  the 
men  on  strike.  Judge  Jackson,  of  West  Vir- 
ginia, even  enjoined  persons  from  supplying 
food  to  strikers.  Such  injunctions  are  a  direct 
attack  on  American  institutions,  and  encourage 
a  general  distrust  and  contempt  of  the  judiciary. 

Natural  justice  and  liberty  demand  the  strong- 
est protest  against  "government  by  injunction," 
as  a  dangerous  and  unconstitutional  violation  of 
individual  rights.  If  an  action  is  punishable  as 
a  crime  under  the  laws,  an  injunction  against 
that  crime  can  add  no  terror  to  the  penalty,  and 
its  only  object  is  that  men  accused  of  violating 
the  injunction  can  be  tried  for  "  contempt " 
without  a  jury,  by  the  judge  who  issues  it,  in- 
stead of  being  prosecuted  as  are  other  accused 
persons,  by  grand  and  petit  jury.  If  the  action 
enjoined  is  not  illegal  in  itself,  then  the  injunc- 
tion is  an  arbitrary  usurpation  of  power.* 

But  so  long  as  the  country  and  its  government 
is  left  in  the  hands  of  those  whose  financial  in- 

♦Debs   was   tried   before   Judge   Woods    and    imprisoned    for 


MONEY   MAKING  214 

IN   FREE   AMERICA 

terests  are  against  those  of  the  workers,  we  will 
have  more  of  such  judge-made  laws. 

Workingmen  who  have  got  into  ai  way  of 
thinking  that  unions  will  do  all  that  is  needful 
to  give  them  the  full  reward  of  their  labor,  and 
that  if  everybody  could  be  got  to  join  the  ranks 
of  organized  labor,  wages  would  rise  and  wealth 
be  justly  distributed,  should  study  the  question 
further.  They  will  find  that  no  matter  how  well 
organized  they  may  be,  they  will  fight  in  vain 
against  low  wages  (and  against  high  rents  which 
make  seemingly  good  wages  reallj^  small),  so 
long  as  others  control  the  opportunities  to  labor. 

RESTRICTION    OF    IMMIGRATION 

Seeing  that  there  is  an  enormous  surplus  of 
unemployed  labor  in  the  United  States,  some 

six  months  for  contempt  of  the  injunction  forbidding  "obstruct- 
ing the  mails  and  interfering  with  interstate  commerce." 

Nevertlieless,  when  he  was  indicted  and  tried  before  a  jury  for 
this  same  "  obstructing  the  mails  and  interfering  with  interstate 
commerce,"  it  became  evident  that  he  could  not  be  convicted, 
and  the  prosecution  abandoned  the  case.  President  Cleveland's 
Strike  Commission  reported  that  "  there  is  no  evidence  before 
the  Commission  that  the  officers  of  the  American  Railway  Union 
at  any  time  participated  in  or  advised  intimidation  or  violence 
or  destruction  of  property." 


215  MONEY   MAKING 

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people  have  taken  up  the  cry  of  "  Restrict  Immi- 
gration." This  agitation  is  partly  sincere,  though 
hased  on  ignorance ;  and  it  is  partly  hypocritical. 
The  political  weather  vanes  who  turn  in  obedi- 
ence to  what  they  believe  to  be  public  opinion 
have  discovered  that  there  is  such  a  thing  as  a 
*'  labor  question,"  and  have  tried  to  solve  it  by 
legislation  which  would  shut  out  the  crowds  com- 
ing here  from  foreign  countries.  Some  short- 
sighted trades  unionists  have  also  joined  in  the 
demand  for  restriction,  while  the  paternalistic  or 
Chinese  spirit  finds  a  fitting  expression  in  limit- 
ing the  right  of  free  settlement.  The  kind  of 
men  who  by  courtesy  are  called  "  statesmen  "  and 
are  sent  to  Congress  to  enact  laws,  are  naturally 
impressed  with  the  idea  that  if  there  are  in  the 
country  large  numbers  of  idle  men,  the  remedy 
is  in  keeping  out  all  who  might  come  here  seek- 
ing work.  Of  course,  these  same  "statesmen" 
are  descendants  of  immigrants  from  foreign 
countries,  and  they  would  be  highly  indignant 
at  the  suggestion  that  their  ancestors  should 
have  been  excluded  from  America.  Yet  as  their 
constituents  insist  that  something  should  be  done 


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for  the  relief  of  unemployed  labor,  Senators  and 
Representatives  strive  to  outdo  one  another  in 
erecting  legal  walls  over  which  the  unfortunate 
immigrant  cannot  climb. 

Unhappily  we  haven't  free  conditions  our- 
selves, and  our  workers  who  are  idle  don't  know 
any  better  than  to  shut  out  from  the  United 
States  their  brothers  who  cannot  find  a  chance 
to  work  at  home.  It  is  a  striking  feature  of  the 
departure  from  the  principles  of  the  Republic, 
that  the  free  Commonwealth  of  the  West  is  now 
adopting  the  policy  which  China  and  Japan  en- 
forced for  centuries,  but  are  now  abandoning. 

It  ought  to  be  plain  to  every  sensible  man  that 
the  revival  of  the  "  know-nothing  "  spirit  which 
reverses  American  traditions,  tends  to  sustain 
the  system  which  is  responsible  for  the  involun- 
tary idleness  of  Americans.  The  pretense  that 
restricting  immigration  will  cure  low  wages  and 
lack  of  work  is  a  direct  contradiction  of  the 
theory  industriously  exploited  by  the  same  class 
of  monopoly  defenders,  that  "  over-production  " 
is  the  cause  of  hard  times.  If  it  were  true  that 
we  are  poor  because  we  produce  far  more  food, 


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clothes  and  other  goods  than  we  can  use,  it  would 
seem  only  natural  that  we  should  allow  more 
people  to  come  here  so  as  to  consume  the  surplus 
products.  If  those  who  came  were  actually 
"paupers,"  so  much  the  better,  for  then  they 
would  not  increase  the  business  stagnation  by 
helping  to  produce  more  things. 

If  to  have  many  people  is  a  bad  thing,  then  it 
follows  that  increasing  population,  whether  from 
home  or  abroad,  should  be  discouraged  or  for- 
bidden. To  be  consistent  we  should  also  pass 
laws  limiting  the  number  of  children  that  parents 
should  be  allowed  to  rear,  the  surplus  to  be  de- 
ported, or  maybe  thrown  into  the  rivers,  as  in 
India  or  China. 

But  the  restrictionists  do  not  pretend  to  be 
consistent.  They  talk  of  the  harm  to  American 
workmen  caused  by  the  competition  of  foreign- 
ers in  our  labor  markets,  while,  as  a  matter  of 
fact,  each  newcomer  who  can  find  work  helps 
to  make  markets  for  surplus  American  products. 
If  the  immigrant  is  to  live  he  must  have  food, 
clothes  and  shelter.  This  means  that  the  Ameri- 
cans  who  grow  food,   and  make   clothes   and 


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houses,  find  a  customer  for  what  they  have  to 
sell. 

Behind  the  outcry  against  the  immigration  of 
such  sturdy  men  and  women  as  have  built  up  the 
nation  as  it  is  to-day,  lurks  the  fear  of  the 
"  financiers  "  and  their  hired  defenders  that  the 
people  will  insist  on  knowing  why  so  many 
willing  workers  are  idle.  Once  the  people  could 
be  fooled  with  the  story  that  their  poverty  was 
the  will  of  God.  After  a  time,  when  men  came 
to  know  that  this  was  not  true,  "  scientists  "  like 
Professor  Huxley  tried  to  show  that  all  the  in- 
justice and  inequality  in  the  distribution  of 
wealth  was  due  to  natural  laws.*  Now  that  it 
has  proved  that  this  is  also  a  lie,  the  men  who 
profit  by  monopoly  seek,  by  appeals  to  national 
prejudice  and  race  hatred,  to  delude  the  people 
into  running  after  a  false  remedy,  and  so  to 
neglect  the  true  one.  Can  the  people  be  fooled 
all  the  time? 

*  See  his  "  Essays  on  Natural  Rights,"  in  which  Professor 
Huxley  defends  the  enslaving  of  the  masses  through  private 
ownership  of  land.  Learning,  in  other  lines,  does  not  make 
a  man  a  safe  guide  to  those  who  are  seeking  liberty. 


o 


CHAPTER   XVI 

POLITICAL    CORRUPTION 
NE  of  the  most  curious  of  delusions  is  the 


belief  that  widespread  and  deep-rooted 
evils  can  be  cured  by  trifling  remedies.  Thus, 
for  the  ills  arising  from  political  corruption  and 
misgovernment  by  organizations  formed  for  the 
purpose  of  securing  political  offices,  we  find  it 
gravely  suggested  as  a  remedy  that  we  should 
"elect  good  men  to  office."  Apart  from  the 
absurdity  of  dividing  men  into  the  good  and  the 
bad,  this  plan  for  abolishing  effects  without 
touching  causes  is  ridiculous.  Political  corrup- 
tion is  not,  as  some  moralists  seem  to  believe,  the 
result  of  men's  sinful  nature,  nor  is  it  due  to 
unscrupulous  "  machines."  It  has  its  origin  in 
the  conditions  which  keep  large  numbers  of 
people  in  involuntary  idleness;  which  make  a 
struggle  for  subsistence  the  lot  of  the  great  ma- 
jority of  the  voters  of  the  country;  which  year 
after  year  force  ten  thousand  business  houses 


219 


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into  bankruptcy;*  and  which  create  large 
classes  ready  to  ally  themselves  for  gain  with 
adventurers  who  trade  as  professional  politi- 
cians. Having  its  roots  thus  deep  in  the  rotten 
soil  of  ignorance  and  violation  of  economic  laws, 
it  is  easy  to  see  that  the  efforts  of  "  Good  Gov- 
ernment Clubs,"  "  Municipal  Reform  Leagues," 
and  similar  organizations  of  well-meaning  citi- 
zens must  fail  to  accomplish  the  ends  for  which 
they  are  working.  So  long  as  law-created  con- 
ditions prevent  the  masses  from  acquiring  intelli- 
gence or  using  their  intelligence  for  useful  pur- 
poses, so  long  will  it  be  impossible  to  have  clean 
politics. 

A  number  of  well-meaning  persons  think  that 
the  corruption  of  politics  can  be  cured  by  what 
is  called  "  civil-service  reform."  Their  chief 
representative  is  the  New  York  Evening  Post, 
a  journal  which,  like  most  of  our  prominent 
dailies,  is  owned  by  vested  interests,  but  strives 
for  good  government  and  honesty  in  public  af- 
fairs.    The  Post  declaims  against  the  "  hungry 

*  R.  G.  Dun  &  Co.  report  16,834  failures  for  1907;  a  higher 
percentage  than  any  year  since  1893. 


221  MONEY    MAKING 

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horde  of  ofRce-seekers "  who  seek  employment 
as  the  reward  of  their  poHtical  service,  but  has 
not  a  word  to  say  against  the  main  prop  of  the 
system  which  forces  men  to  struggle  for  the 
small  salaries  of  most  government  positions. 
Prating  of  official  honesty  while  upholding  gi- 
gantic exactions  under  legal  forms  is  saving  at 
the  spigot  to  waste  at  the  bung. 

That  government  officials  should  be  selected 
solely  on  the  ground  of  fitness,  everyone  will 
admit.  But  no  change  in  the  method  of  appoint- 
ing such  officials  can  give  us  "  pure  politics  "  so 
long  as  there  are  a  hundred  men  looking  for 
each  office. 

Senator  Ingalls  was  right.  "  The  purification 
of  politics  is  an  iridescent  dream"  under  the 
present  economic  system.  Patchwork  tinkering 
with  ballot  reform,  proportional  representation, 
or  any  other  proposed  scheme  of  government, 
can  lead  only  indirectly  toward  real  relief  from 
the  tyranny  of  the  boss  or  the  corruption  of  the 
party  machine.  No  patent  idea  of  non-partisan- 
ship in  municipal  elections,  or  of  "  good  citizens 
acting  together  "  in  State  and  national  elections 


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can  vote  knowledge  out  of  ignorance,  or  honesty 
into  men  forced  by  the  hope  of  sorely  needed 
employment  to  support  politics  which  they  know 
to  be  dishonest. 

Akin  to  the  plans  for  political  reform  is  the 
belief  that  if  we  can  only  prevent  bribery  at 
elections  w^e  shall  insure  a  free  and  unbiased 
expression  of  the  public  will.  So  we  have  laws 
imposing  severe  penalties  on  anyone  who  directly 
or  indirectly  gives  or  receives  any  consideration 
for  votes.  Of  course  these  laws  are  violated, 
but  even  though  they  were  strictly  enforced  they 
would  only  change  the  form  of  bribery  from 
cash  to  some  promised  benefit.  Thus  we  find  a 
great  political  party  making  a  direct  appeal  for 
support  on  the  ground  that  if  successful  the  bur- 
den of  national  taxation  will  be  increased  in  or- 
der to  benefit  the  workers  employed  in  certain 
industries,  while  vigorous  work  in  each  campaign 
is  prompted  by  the  knowledge  that  success  would 
mean  the  appointment  of  the  workers  to  office. 
This  is  no  less  a  bribe  because  it  is  a  general 
offer  of  public  funds  in  aid  of  certain  private 
persons,  yet  the  moralists  who  are  shocked  at 


223  MONEY   MAKING 

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the  payment  by  John  Jones  of  $3  for  William 
Smith's  vote,  have  little  or  nothing  to  say  about 
the  corrupting"  of  voters  by  wholesale. 

A  few  years  ago  there  was  a  general  demand 
for  "  ballot  reform  "  or  a  change  in  the  method 
of  casting  ballots  for  government  officers.  Much 
was  claimed  for  the  "  Australian "  voting  sys- 
tem as  a  means  of  promoting  the  election  of 
honest  and  independent  candidates.  But  al- 
though "  ballot  reform "  has  been  adopted  in 
all  the  States  except  Georgia  and  the  Carolinas, 
we  find  to-day  that  the  party  machine  is  nearly 
as  strong  as  ever,  and  is  able  to  thrust  its  nomi- 
nees on  the  public  as  it  did  under  the  old  system. 
And  this  must  continue  while  politics,  or  the  busi- 
ness of  electing  lawmakers,  affords  an  opportu- 
nity for  money-making  to  men  who  cannot  get 
a  living  by  honest  industry. 

Honesty  is  a  good  thing  in  politics,  as  well  as 
in  private  business.  We  should  have  business 
methods  in  all  public  affairs.  The  rule  of  cor- 
rupt political  machines  should  be  thrown  off. 
The  will  of  the  people,  and  not  of  a  self-con- 
stituted boss,  should  prevail.    But  to  try  to  se- 


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cure  these  desirable  ends  in  political  life,  while 
maintaining  a  system  which  invites  and  encour- 
ages the  opposite  conditions,  is  nonsense. 

The  political  corruption  of  our  large  cities  has 
been  exposed  by  Lincoln  StefFens  under  the  title 
of  "  The  Shame  of  the  Cities."  In  "  Enemies 
of  the  Republic,"  Mr.  Steff  ens  shows  the  source 
of  legislative  corruption.    He  says: 

"  Every  time  I  attempted  to  trace  to  its  source 
the  political  corruption  of  a  city  ring,  the  stream 
of  pollution  branched  off  in  the  most  unexpected 
directions.  ...  It  flowed  out  of  the  ma- 
jority party  into  the  minority;  out  of  politics 
into  vice  and  crime,  out  of  business  into  politics, 
and  back  into  business.  .  .  .  We  are  all  of 
us  on  the  wrong  track.  You  can't  reform  a  city 
by  reforming  a  part  of  it.  You  can't  reform  a 
city  alone.  You  can't  reform  politics  alone. 
.  .  .  The  corruption  of  our  American  poli- 
tics is  our  American  corruption,  political,  but 
financial  and  industrial,  too. 

"  Our  political  corruption  is  a  system,  a  regu- 
larly established  custom  of  the  countr^^  by  which 
our  political  leaders  are  hired,  by  bribery,  by  the 
license  to  loot,  and  by  quiet  moral  support,  to 


S9S  MONEY   MAKING 

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conduct  the  government  of  city,  State,  and 
nation,  not  for  the  common  good,  but  for  the 
special  interests  of  private  business.  Not  the 
politician,  then,  not  the  bribe-taker,  but  the  bribe- 
giver, the  man  we  are  so  proud  of,  our  success- 
ful business  man,  he  is  the  source  and  the  sus- 
tenance of  our  bad  government.  The  captain 
of  industry  is  the  man  to  catch.  His  is  the  trail 
to  follow." 

During  this  year,  however,  Mr.  SteflPens  has 
published  in  McClure's  his  conviction  that  "  man- 
hunting  "  is  useless :  that  the  captain  of  indus- 
try is  himself  the  victim  of  our  vicious  system 
of  monopoly. 

Make  the  masses  of  the  voters  prosperous  and 
independent  of  the  few  offices  to  be  doled  out 
to  political  partisans,  and  abolish  the  power  of 
legislatures   to    confer   special    privileges,    and 
there  will  soon  be  an  end  of  the  evils  which  the 
"  good  "  reformers  are  trying  to  cure  with  bread- 
pills  and  sugar-and-water  draughts. 
V     If  the  "  Good  Government "  advocates  wish   , 
to  succeed,  let  them  help  to  abolish  the  causes    \ 
of  involuntary  idleness  and  poverty.    That  done,     | 
they  will  find  that  the  symptoms  of  social  dis-    / 


MONEY   MAKING  226 

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ease  which  they  take  to  be  the  disease  itself,  will 
quickly  disappear. 

As  a  means  of  getting  what  we  want  we 
should,  of  course,  have  popular  election  of  Sen- 
ators, and  we  shall  get  it.  Something  has  been 
accomplished  and  much  is  to  be  hoped  for  as 
effective  methods  of  expressing  our  will  from 
the  Initiative  and  Referendum,  and  more  from 
Proportional  Representation. 

Until  we  get  these,  the  "  Winnetka  plan," 
first  tried  at  the  home  of  the  late  Henry  D. 
Lloyd,  in  Illinois,  works  well  and  immediately. 
It  consists  simply  in  requiring  from  each  legis- 
lative candidate  before  voting  for  him  at  elec- 
tion, a  written  pledge  to  introduce  or  support 
one  resolution  in  his  own  assembly  of  law- 
makers. This  resolution  provides  that  upon  the 
written  request  of  five  per  cent,  of  the  voters 
any  proposed  law  shall  be  put  to  popular  vote 
before  it  goes  into  operation.  So  far,  for  plain 
reasons,  such  pledges  have  been  kept. 

These  reforms,  known  as  "Direct  Legisla- 
tion," are  vigorously  pushed.  IMr.  Eltweed  Pom- 
eroy,  of  Newark,  New  Jersey,  will  gladly  send 


297  MONEY   MAKING 

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information  as  to  plans  and  progress  of  this 
splendid  movement,  which  is  one  of  the  most  en- 
couraging signs  of  popular  awakening. 

The  Cincinnati  Post  says  editorially  in  1908:  Behold, 
the  people  that  walked  in  darkness  have  seen  a  great  light. 
Out  of  Oregon  came  a  sign.  A  mighty  hope  has  been  born. 
A  new  and  magic  watchword  has  been  sounded.  "  Back  to 
the  people  " — that  is  the  blazing  banner  round  which  gath- 
ers to-day  a  victorious  host. 

The  demand  for  the  initiative  and  referendum  is,  in  the 
opinion  of  many,  the  most  portentous  movement  in  Ameri- 
can  politics. 

The  bosses  have  seemed  to  hardly  notice  it,  and  the  cor- 
porations have  only  recently  taken  alarm.  But  it  is  too 
late.  As  stealthily  as  the  tide,  this  great  undercurrent  of 
democracy  has  surrounded  them,  has  cut  them  off. 

Like  a  thief  in  the  night,  a  revolutionary  principle  has 
stolen  into  the  Constitutions  of  five  of  our  States.  It  is 
knocking  now  at  the  doors  of  twenty  State  legislatures. 
It  is  in  full  operation  in  half  a  hundred  cities.  The  Su- 
preme Courts  of  five  of  the  States  have  bowed  to  it.  And 
while  the  corporations  are  now  asking  the  Supreme  Court 
of  the  United  States  to  outlaw  it,  their  case  seems  hopeless. 

The  movement  is  irresistible.  Government  by  private 
monopolies  has  run  its  course.  The  hour  has  struck.  The 
people  are  rising. 

Consider  the  history  we  have  been  making. 

South  Dakota,  through  the  initiative  and  referendum, 
established  popular  sovereignty  in  1898.  This  fall  the 
people  take  a  direct  vote  on  their  divorce  laws. 


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» 

The  right  to  make  or  unmake  laws  by  a  direct  vote  at 
the  polls  was  won  by  the  people  of  Oregon  in  1902.  Since 
then  they  have  voted  on  32  measures.  Seventy-four  per 
cent,  of  the  electors,  on  the  average,  have  participated  in 
these   32  votes. 

After  an  inexpensive  educational  campaign  of  a  few 
months  the  people  have  passed,  by  overwhelming  majorities, 
laws  that  it  would  have  taken  twenty  years  to  get  through 
the  lobby-ridden  legislatures. 

The  people  of  Nevada  acquired  the  right  of  referendum 
voting  in  1905.  This  year  the  legislature  passed  a  bill  to 
create  an  army  of  mercenaries  for  the  benefit  of  the  mine 
owners.  But  ten  per  cent,  of  the  mineworkers  can  hold 
it  up.  Between  them  and  the  legislature  the  people  will 
decide. 

The  right  of  direct  legislation  was  incorporated  in  the 
Constitution  of  Montana  in  1906.  This  year  the  people 
are  going  after  three  laws,  a  direct  primary  for  United 
States  Senators,  an  anti-inj  uction  law  and  an  employers' 
liability  act. 

Oklahoma  started  out  with  the  initiative  and  referendum 
last  year.  This  fall  a  referendum  vote  is  to  be  taken  on 
the  question  as  to  whether  the  three  million  acres  of  school 
lands  shall  be  seized  by  the  speculators  or  be  saved  for  the 
children  of  tlic  commonwealth. 

This  is  the  roll-call  of  the  free  States.  And  the  number 
is  steadily  growing.* 

This  is  the  line  of  march  in  America.  The  people  every- 
where are  going  to  make  and  unmake  their  own  laws  when 
they  are  not  satisfied  with  the  work  of  their  representatives. 

*  Note — Republican  Maine  has  adopted  the  amendment  since 
this  was  written. 


CHAPTER  XVII 

INCOME    AND    INHERITANCE    TAXES 

TO  check  the  rapid  increase  of  huge  fortunes 
and  the  power  of  their  possessors,  some 
reformers  advocate  an  income  tax,  or  graduated 
taxation  of  inheritances  or  of  property.  An 
income  tax  is  a  good  plan  in  some  respects  for 
getting  back  a  tithe  of  what  has  been  taken, 
though  it  robs  the  honest  man  as  against  those 
wiUing  to  take  false  oaths.  But  it  is  mainly  a 
device  for  drying  up  the  lake  without  diverting 
the  springs:  it  is  as  if  the  bees  should  tax  the 
honey  that  is  extracted  from  their  hives.  And 
its  essential  feature,  that  of  making  people  pay 
for  public  expenses  according  to  their  ability, 
is  unsound.  The  true  basis  of  taxation  is  the  ben- 
efit received  by  the  individual  from  the  services 
of  government.  An  income  tax  is  class  legis- 
lation, because  it  is  intended  to  be  levied  only 
on  those  receiving  an  income  over  a  certain 
amount.     Men  who  want  a  free  field  and  no 

239 


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favor,  should  not  ask  for  a  law  which  would 
favor  the  poor,  any  more  than  for  one  to  favor 
the  rich. 

As  for  the  inheritance  tax,  its  advocates  base 
their  arguments  on  the  idea  that  the  rich  men 
of  one  generation  leave  actual  wealth — products 
of  labor — to  their  heirs.  This  is  an  error.  What 
is  really  inlierited  is  titles  to  wealth  which  will 
be  produced  in  the  future,  as  is  well  shown  by 
Louis  F.  Post,  editor  of  the  Chicago  Public: 

*'  One  of  the  pernicious  fallacies  in  economic 
discussion  is  the  notion  that  great  wealth  can 
be  inherited. 

*'  Everyone  will  agree  that  he  who  will  not 
work  shall  not  eat.  But  this  doctrine  of  good 
morals  and  sound  economics  is  continually  denied 
in  practice,  not  so  much  by  begging  tramps,  at 
whom  it  is  preached,  as  by  comfortable  classes 
who  do  the  preaching.  Though  honestly  of  the 
opinion  that  idlers  have  no  right  to  eat,  they  ac- 
count for  luxurious  idlers  with  the  explanation 
that  they  live  upon  the  earnings  of  departed  an- 
cestors. It  is  assumed  that  wealth  can  be  passed 
down  from  generation  to  generation. 


231  MONEY   MAKING 

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"This  is  true  of  some  forms  of  wealth  only. 
Broadly  speaking,  all  that  men  require  for  life 
and  comfort,  which  can  be  earned  by  work,  is 
consumed  almost  as  soon  as  it  is  produced. 
Houses  are  permanent  enough  in  character  to 
be  inherited,  but  they  will  not  serve  their  pur- 
pose unless  kept  in  repair  by  work.  Machinery 
lives  a  short  life.  Food  is  the  product  of  a  day, 
and  clothing  of  a  season.  If  the  making  of 
clothing  stopped  to-day,  we  should  all  be  in  rags 
in  a  few  months ;  if  the  making  of  food  stopped 
to-day,  we  should  be  starving  within  a  week. 
Things  like  these  can  be  inherited  certainly;  but 
it  is  not  to  such  things  that  reference  is  made 
when  it  is  said  that  the  luxurious  idle  live  upon 
the  accumulations  of  their  ancestors. 

"  If  the  question  were  asked:  To  what  is  refer- 
ence made?  a  probable  answer  would  be,  Money. 
But  men  do  not  inherit  money.  There  is  very 
little  money  in  the  world.  Even  a  millionaire's 
son  would  receive  but  a  trifle  in  cash  from  his 
father's  estate.  What  is  really  referred  to,  and 
what  the  imagination  includes  in  the  familiar 
term  "money,"  is  not  accumulated  food  or  cloth- 


MONEY   MAKING  233 

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ing,  for  they  are  transitory;  nor  buildings,  for 
thej^  are  only  a  little  less  so ;  nor  even  machinerj^ 
for  that  will  neither  repair  nor  run  itself;  nor 
money,  for  this  generation  does  not  live  by 
spending  the  accumulated  coins  of  a  previous 
generation.  The  reference  is  to  some  form  of 
monopoly — some  legal  right  to  control  the  ac- 
tivities and  appropriate  the  earnings  of  other 
people. 

"  The  simplest  illustration  is  chattel  slavery. 
Idle  sons  of  dead  slaveholders  were  able  to  live 
without  working,  not  because  their  fathers  had 
left  them  food  and  clothing  and  buildings  and 
horses  and  carriages  and  money,  accumulated 
during  a  laborious  and  productive  life,  but  be- 
cause they  had  left  slaves  to  them.  The  idle  heirs 
w^re  able  to  be  luxurious,  though  idle,  because 
they  had  inherited  from  their  fathers  the  legal 
but  devilish  power  of  compelling  other  men  to 
work  for  them. 

"  But  slavery  is  only  an  example.  It  is  not 
the  only  institution  which  thus  enables  men  to 
live  upon  the  enforced  labor  of  other  men,  while 
seeming  to  live  upon  the  earnings  of  ancestors. 


233  MONEY    MAKING 

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Every  inherited  monopoly  belongs  in  the  same 
category.  And  it  is  by  means  of  monopolies, 
either  inherited  or  acquired,  as  slaves  were  once 
inherited  or  acquired,  that  idleness  and  luxury 
go  together  in  our  time.  Those  who  live  richly 
without  working  are  satisfying  their  wants  from 
no  accumulated  stores  of  the  past;  they  are  do- 
ing it  from  the  tribute  which  their  monopolies 
enable  them  to  exact  from  the  labor  of  the  pres- 
ent. As  truly  as  did  ever  a  Southern  slaveholder, 
they  eat  their  bread  in  the  sweat  of  other  men's 
faces.  Great  fortunes  consist  not  of  stored-up 
products,  but  of  the  growing  power  of  the  mo- 
nopolies. And  when  those  fortunes  pass  into 
the  hands  of  a  younger  generation  the  inheritors 
will  be  rich,  not  so  much  in  things  to  consume, 
which  grow  less  as  consumption  goes  on,  as  in 
the  power  they  will  have  of  exacting  an  abund- 
ance of  such  things  throughout  their  lives  from 
their  fellow  men  who  produce  them.  They  are 
heirs  to  the  privilege  of  setting  up  toll  gates 
on  the  highways  of  industry." 

If  we  want  to  tax  these  inherited  privileges  or 
monopolies,  let  us  tax  them  directly  as  such  and 


MONEY    MAKING  234 

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not  merely  tax  occasionally  a  part  of  their  pro- 
duct. 

A  further  objection  to  the  inheritance  tax  is 
that  it  can  be  largely  avoided  by  the  trans- 
fer or  partial  gift  of  property  by  the  owner  to 
his  heirs  during  his  lifetime.  This  is  the  case 
in  France  and  England,  where  heavy  "  death 
duties,"  as  they  are  called,  are  imposed.  Mr. 
George  W.  Smalley,  New  York  correspondent 
of  the  London  Times,  wrote  from  England  fif- 
teen years  ago  an  account  of  the  extent  to  which 
the  inheritance  tax  had  forced  the  distribution 
of  property  while  its  owners  were  living,  and 
referred  to  the  case  of  a  very  rich  man  who 
had  given  to  his  children  his  entire  property, 
in  order  to  escape  the  payment  of  the  tax.  And 
what  is  done  in  England  is  done  in  America,  as 
inheritance  taxes  increase,  as  in  the  case  of  the 
sixteen  million  dollars  distributed  by  Wm.  H. 
Singer  among  his  children,  as  reported  in  the 
press  Sept.  17,  1908. 

Taxes  on  personal  property,  that  is,  wealth  in 
the  form  of  merchandise,  farm  stock,  machinery, 
tools,   furniture,  pictures,  books,  bonds,  mort- 


SB6  MONEY   MAKING 

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gages  and  capital  invested  in  productive  indus- 
try, are  favored  by  some  people — mostly  farm- 
ers. The  latter  think  that  because  the  rich  own 
most  of  the  personal  property,  a  tax  levied  on 
it  would  be  paid  mainly  by  the  rich. 

Taxes  on  merchandise  of  all  kinds  make  goods 
dearer,  and  consequently  diminish  their  use.  Thus 
a  tax  on  farm  implements,  wagons,  machinery, 
etc.,  will  make  some  farmers  buy  less  of  those 
things  than  they  could  buy  if  there  were  no  taxes 
on  such  forms  of  wealth.  So  that  although  at 
first  sight  it  may  look  as  though  the  personal 
property  tax  was  a  good  thing  for  labor,  on 
closer  examination  it  will  be  seen  that  it  discour- 
ages the  production  of  wealth.  Since  the  only 
way  to  be  prosperous  is  to  have  plenty  of  goods, 
it  is  clear  that  to  tax  goods  or  the  capital  en- 
gaged in  producing  goods,  is  a  blunder. 

Taxes  on  personal  property  in  the  form  of  evi- 
dences of  loans  of  capital,  tend  to  make  capital 
scarce,  and  to  increase  interest  rates.  This  ham- 
pers industry  and  checks  business.  Bonds  and 
mortgages  are  not  really  wealth,  but  only  evi- 
dences that  the  owner  has  some  wealth,  which 


MONEY    MAKING  236 

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wealth  is  taxed  somewhere.  To  tax  hoth  a  lot 
of  land  and  the  mortgage  on  it,  is  unjust,  be- 
cause it  is  double  taxation. 

It  is  just  the  same  as  if  we  should  tax  a  mer- 
chant on  the  merchandise  in  his  store  and  then 
tax  him  again  on  what  he  owes  for  it. 

Aside  from  their  unfairness,  and  the  difficulty 
of  collecting  them,  income,  inheritance  and  per- 
sonal property  taxes  are  mere  makeshifts,  and 
can  do  nothing  to  change  the  system  under  which 
monstrous  fortunes  are  built  up.  And  in  so  far 
as  they  tend  to  make  men  satisfied  with  the  ex- 
istence of  these  unearned  fortunes,  by  holding 
out  the  expectatioji  of  getting  for  the  people  a 
share  of  the  income,  or  a  part  of  the  principal 
in  case  of  the  owner's  death,  they  are  distinctly 
injurious,  and  hinder  the  coming  of  a  wiser 
order  of  things. 

Of  course  an  income  tax  would  be  a  far  better 
method  of  taxation  than  our  present  taxes  on 
goods,  machinery,  capital  and  buildings.  All 
these  taxes  are  cumbrous,  and  injurious  to  trade 
and  industry,  and  should  be  abolished  as  soon 
as  possible.     And  if  the  people  haven't  sense 


237  MONEY   MAKING 

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enough  to  see  that  there  is  a  better  tax  than  that 
on  income,  by  all  means  let  us  have  the  income 
tax  as  the  lesser  evil. 

But  there  is  a  better  tax:  it  is  a  tax  on  the 
value  of  land,  apart  from  improvements.  This 
is  simple,  direct,  easily  levied,  and  easily  col- 
lected. It  will  take  the  burden  of  taxation  off 
the  producers  and  put  it  on  monopoly.  It  does 
away  with  the  deceit  and  perjury  inseparable 
from  all  forms  of  indirect  taxation,  and  will 
prevent  the  frauds  which  are  so  common  in  the 
customs,  internal  revenue,  and  other  tax  depart- 
ments of  national,  State  and  municipal  govern- 
ments. 

It  encourages  industry  by  freeing  it  from 
taxation  and  by  opening  up  to  the  use  of 
the  workers  all  valuable  natural  resources  now 
held  idle  for  speculative  purposes.  It  will  es- 
tablish a  system  of  land-holding  in  which  every- 
one will  have  a  share  in  the  ownership  of  the 
earth.  It  will  not  merely  take  back  a  little  of 
the  wealth  of  which  monopoly  milks  labor.  It 
will  stop  the  milking.  And  its  adoption  will  re- 
sult in  the  distribution  of  wealth  so  that  each 


MONEY   MAKING  238 

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producer  will  get  his  fair  share  of  the  product  of 
his  labor. 

You  may  think  these  claims  extravagant. 
Then  read  Henrj^  George's  book,  "  Social  Prob- 
lems"; and  "Natural  Taxation,"  by  Thomas 
G.  Shearman. 


CHAPTER  XVIII 

HIGH    TARIFF    REFORM 

DON'T  be  afraid  that  you  are  going  to  be 
treated  to  an  old-time  tariff  argument.  The 
tariff  has  been  discussed  these  many  years;  the 
newspapers  are  full  of  it,  and  in  hundreds  of  vol- 
umes you  can  already  find  long  statements  of 
both  sides  of  the  question.  Besides,  you  have 
doubtless  grown  tired  of  that  endless  talk  of  rev- 
enue, tariff  reform,  free  raw  materials,  the  home 
market,  foreign  pauper  labor,  our  infant  indus- 
tries, protection  wages,  and  the  rest  of  the  form- 
ulas over  which  politicians  wrangle.  All  we  want 
to  know  is:  "Will  increased  duties  bring  pros- 
perity? If  so,  how?  If  so,  let  us  have  them." 
During  the  Presidential  campaigns  of  1896 
and  1900  the  chief  argument  of  the  Republicans 
was  that  the  depression  of  business  was  due  to 
reductions  in  duties  made  in  1894,  and  that  the 
re-enactment  of  the  tariff  of  1890  would  be  fol- 
lowed by  permanent  prosperity.  "  The  Advance 
Agent  of  Prosperity";  "Protection  will  give 

239 


MONEY   MAKING  240 

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work  and  wages  for  all " ;  "  Republican  Success 
will  re-open  the  Mills  and  Factories  " ;  "  Vote  for 
the  Tariff  and  Good  Times,"  were  some  of  the 
campaign  mottoes. 

Suppose  a  stranger  from  Mars  should  visit 
the  earth.  Landed  in  America,  let  us  imagine 
him  then  informed  of  our  everlasting  tariff  dis- 
cussion. Would  not  his  natural  question  be:  *'  In- 
stead of  disputing  about  your  theories  of  pro- 
tection, why  don't  j^ou  try  the  sj^stem  and  see 
how  it  works?  "  Then  he  would  be  told  that  we 
have  tried  it  for  more  than  half  a  century,  but 
that  the  people  are  as  much  divided  as  ever.  One 
side  claims  that  progress,  invention,  growth  in 
population,  and  business  development  generally, 
have  been  due  to  protection.  The  other  side  as- 
serts that  the  high  tariff  system  has  hampered 
commerce  and  industry;  has  oppressed  the 
masses  with  heavy  tax  burdens,  and  has  retarded 
the  country's  development  in  manufacturing  in 
competition  with  the  rest  of  the  world ;  and  points 
out  that  the  panic  of  1907  came  under  the  fixed 
rule  of  the  highest  tariff  we  have  ever  had. 

Nor  is  there  any  more  agreement  as  to  the 


241  MONEY   MAKING 

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prosperity.  Ex-President  Harrison  declared  in 
1892  that  because  of  the  McKinley  tariff  the 
country  enjoyed  the  widest  measure  of  prosper- 
ity. Yet  that  year  the  mihtia  was  called  out  in 
four  States  to  suppress  rioting  by  strikers  or 
discharged  workmen;  the  Carnegie  Steel  Works 
cut  down  wages  of  thousands  of  men  and  found 
no  difficulty  in  filling  their  places  when  they  went 
out  on  strike;  in  every  State  there  were  closed 
factories,  idle  workers,  lockouts,  and  labor 
troubles,  in  short,  every  evidence  of  the  reverse 
of  prosperity.  Such  is  the  conflicting  testimony 
on  the  important  question,  "Has  protection 
brought  prosperity  in  the  past?" 

But  you  can  at  least  judge  by  your  own  ex- 
perience. Are  you  prosperous  now?  Yes? 
Then  probably  you  are  satisfied,  as  far  as  you 
are  concerned;  but  how  has  it  affected  others? 
Has  it  proved  a  cure  for  the  social  troubles 
which  all  see  and  recognize?  Has  it  remedied 
the  bad  state  of  the  country?  If  not,  sooner  or 
later,  in  one  form  or  another,  the  troubles  of 
your  fellow  men  will  reach  you. 

Most  people  have  short  memories,  and  the 


MONEY   MAKING  243 

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press  has  succeeded  in  making  a  good  many  peo- 
ple believe  that  the  period  previous  to  the  slight 
reduction  in  the  tariff  was  one  of  unbounded 
prosperity.  If  you  would  rather  accept  the 
statements  of  partisan  newspapers  than  think 
for  yourself,  you  will  continue  to  believe  that 
the  Golden  Age  of  Labor  came  to  an  end  in 
August,  1894,  because  the  average  customs  du- 
ties were  reduced  by  the  Wilson  law  from  forty- 
seven  to  forty-one  per  cent.  But  if  you  are  ac- 
customed to  looking  for  better  proof  than  some- 
body else's  say-so,  you  will  probably  decide  that 
protection  does  not  deserve  credit  for  even  the 
limited  prosperity  of  the  last  forty  years. 

Take  into  consideration  that  the  duties  im- 
posed by  the  Wilson  "  free  trade  "  bill  were  on 
an  average  higher  than  those  of  the  tariff  be- 
fore the  McKinley  law,  and  that  the  Dingley 
bill  rates  are  higher  yet.  Of  course,  you  know 
that  the  great  panic  of  1893,  when  hundreds  of 
banks  failed,  mills  and  factories  shut  down, 
merchants  went  into  bankruptcy  and  railroads 
into  the  hands  of  receivers  and  the  country  was 


243  MONEY   MAKING 

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filled  with  idle  men  and  women,  came,  like  the 
last  one,  under  these  high  tariffs. 

Let  us  look  at  the  reasons  given  for  think- 
ing that  this  scheme  will  assure  prosperity  in 
the  future.  You  must  have  noticed  that  the 
campaign  orators  talk  of  the  tariff  as  a  "  grand 
American  policy  " ;  denounce  those  who  do  not 
believe  in  it  as  "  British  free  traders  "  and  "  ene- 
mies of  American  industry,"  and  draw  glowing 
pictures  of  the  happy  time  to  come,  when  all 
foreign  trade  will  be  shut  out.  But  they  do 
not  agree  among  themselves  as  to  how  the  prom- 
ised prosperity  is  to  come. 

By  calHng  a  high  tariff  patriotic,  and  dis- 
tinctively American,  a  good  many  people  have 
been  led  to  swallowing  the  "system."  "Patri- 
otic," in  this  case  as  in  many  other,  means  stupidly 
selfish.  The  truth  is  that  protection  is  a  Chinese 
policy,  adopted  by  China  more  than  two  thou- 
sand years  ago,  and  continued  down  to  a  recent 
period.  The  result  of  centuries  of  restriction  is 
seen  in  the  condition  of  the  Chinese,  whose  wages 
are  lower  and  conditions  of  living  meaner,  than 


MONEY   MAKING  244 

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in  any  other  country  which  pretends  to  be  civi- 
lized. 

The  arguments  for  protection  are  about  as 
follows : 

*'  That  heavy  tariff  taxes  keep  out  foreign 
goods;  that  this  increases  the  demand  for  do- 
mestic products;  that  this  increased  demand 
gives  more  employment  to  labor;  that  the  in- 
creased employment  of  labor  raises  wages  and 
enables  the  workers  to  buy  more  goods  of  all 
kinds;  and  it  is  said  that  excluding  foreign  com- 
petition gives  American  manufacturers  better 
prices  and  therefore  larger  profits,  out  of  which 
they  can  pay  the  higher  wages;  that  indirectly 
the  farmers  are  benefited  by  the  building  up  of 
a  '  home  market '  for  their  products.  And 
while  the  advantage  of  high  prices  to  producers 
is  thus  urged  in  favor  of  a  high  tariff,  it  is 
claimed  at  the  same  time  that  the  stimulation  of 
domestic  industry  by  the  same  tariff  reduces 
prices  lower  than  they  would  be  under  free 
trade." 

It  is  assumed  that  by  making  all  our  goods  in 
this  country,  instead  of  buying  some  of  them 


245  MONEY   MAKING 

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abroad,  we  would  Increase  the  demand  for  Amer- 
ican labor  and  for  American  products.  But 
when  goods  are  brought  here  from  another 
country  they  must  be  paid  for  either  in  money 
or  in  goods.  If  they  are  paid  for  in  money,  it 
is  either  in  gold  or  silver,  which  are  products 
of  labor  in  our  mines,  and  therefore  to  get  the 
price  gives  employment  to  American  workers. 
If  we  pay  for  imports  with  exported  goods, 
they  also  are  products  of  labor  in  our  factories, 
farms  or  mines  and  give  employment  to  Ameri- 
can factory  employees,  farmers  or  miners.  So 
that  in  either  case  there  is  as  much  demand  for 
labor  as  though  the  goods  were  made  in  this 
country.  Whether  Americans  are  employed  in 
mining  copper  or  gold,  or  in  growing  wheat 
which  is  sent  to  England  to  be  exchanged  for 
copper  or  gold  makes  no  difference  in  creating 
a  demand  for  labor.  Since  all  trade  is  barter, 
or  the  swapping  of  one  kind  of  labor  products 
for  another  kind,  the  importation  of  goods  from 
other  countries  creates  a  demand  for  American 
products  with  which  to  pay  for  the  foreign 
goods. 


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Nevertheless,  a  mere  increase  in  our  exports 
won't  materially  help  us.  When  the  Balance 
of  Trade  is  in  our  favor,  according  to  other 
authorities,  there  are  good  times.  According  to 
me  there  ought  to  be  good  times  always. 

Now,  Great  Britain's  Balance  of  Trade  has 
been  almost  steadily  "  against  "  her  for  the  past 
forty-five  years  and  ours  has  been  almost  steadily 
*'  in  our  favor."  Likewise  we  always  sent  away 
more  ^old  and  silver  than  we  got  back.  Yet  we 
are  proud  that  Europe  is  constantly  buying  our 
securities. 

The  only  large  countries  with  a  so-called 
"  favorable  "  balance  of  trade  are  the  United 
States,  the  Argentine  Republic,  Russia  and  In- 
dia. 

Suppose  a  storekeeper  told  you  he  was  ship- 
ping away  more  and  more  merchandise  every 
year  than  he  was  receiving  and  that  he  had  paid 
out  much  more  money  than  he  received,  and  fi- 
nally that  he  was  putting  out  plenty  of  notes. 
Would  you  say,  "You  must  be  getting  rich." 
No;  you  would  say,  "  Better  make  an  assignment 
before  all  your  assets  are  gone." 


g47  MONEY    MAKING 

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This  is  the  favorable  balance  of  trade  that 
Paddy  gets  when  he  has  to  send  the  pig  to  the 
landlord  for  the  balance  of  the  rent.  After  a 
while  Paddy  will  inquire  what  he  gets  back  for 
what  he  gives. 

If  protectionist  theories  were  accepted  every- 
where, foreign  countries  would  stop  buying 
over  $800,000,000  worth  of  our  products  each 
year,  for  if  it  is  a  bad  thing  for  Americans  to 
buy  things  abroad,  it  must  be  equally  bad  for 
Europeans  to  buy  things  abroad.  Would  our 
farmers  and  workingmen  like  to  see  our  great 
export  trade  destroyed  by  laws  that  would  shut 
our  products  out  of  foreign  markets?  Of 
course  they  wouldn't.  If  a  high  tariff  increases 
competition  and  thus  lowers  prices,  it  can't  also 
give  the  manufacturer  higher  prices,  out  of 
which  he  might  pay  higher  wages.  The  same 
poUcy  cannot  work  both  ways. 

The  real  strength  of  the  protection  scheme 
is  that  shutting  out  goods  by  tariff  walls  around 
this  country,  makes  more  work  for  the  people 
here.  To  some  extent  this  is  true.  Protection 
makes  more  work  in  that  it  compels  men  to  work 


MONEY   MAKING  248 

IX    FREE    AMERICA 

harder  to  get  the  goods  they  want,  just  as  bad 
harbors  make  more  work  for  pilots.  The 
man  who  urged  the  workers  to  break  all 
bottles  after  emptying  them,  so  as  to  make  more 
work  for  the  glass  blowers,  was  one  of  this  kind 
of  protectionists.  But  you  know  better  than  to 
believe  in  that.  You  know  that  what  the  people 
need  is  not  more  work,  in  the  sense  of  harder 
labor,  but  to  get  more  things  by  the  least  pos- 
sible labor.  If  our  laws  compel  the  farmers 
to  buy  their  glass  in  this  country,  when  if  left 
to  themselves  they  would  buy  it  cheaper  in  Bel- 
gium, this  does  not  in  the  end  give  more  oppor- 
tunities to  the  people  in  America.  It  only 
changes  the  nature  of  the  work  in  which  some 
Americans  will  be  engaged. 

If  the  American  glass  worker  could  not  make 
glass  as  cheaply  as  it  could  be  done  in  Belgium, 
he  would  go  to  work  making  something  else. 

That  is,  under  freedom  he  would  do  so.  Now 
he  cannot  find  anything  else  to  do. 

Even  under  present  conditions  a  tariff  does 
not  make  more  opportunities  for  work  in  Amer- 
ica.    If  the  Belgian  glass  blower  cannot  send 


S49  MONEY   MAKING 

IN    FREE    AMERICA 

his  glass  to  America  in  exchanp^e  for  our  wheat, 
or  pork,  or  cotton,  he  must  buy  those  products 
from  some  other  country  which  will  take  his 
glass.  This  will  destroy  the  market  for  as  much 
of  our  farm  products  as  we  now  sell  to  Bel- 
gium, or  sell  to  those  who  sell  to  Belgium,  and 
some  of  our  farmers  will  be  unable  to  sell  their 
crops ;  then  there  will  be  less  demand  for  Amer- 
ican farm  labor,  which  will  crowd  into  the  cities 
and  towns  and  still  further  reduce  wages  by 
swelling  the  numbers  of  imemployed,  willing 
to  work  for  lower  wages. 

Men's  minds  have  got  so  confused  by  the  no- 
tion of  "  over-production,"  that  to  most  people 
it  seems  that  there  are  alwaj^s  more  goods  made 
than  can  be  used,  and  that,  therefore,  if  we  ex- 
change American  grain  for  English  blankets, 
we  lessen  the  demand  for  American  manufac- 
tures. Where  the  opportunities  for  production 
are  open  and  free  the  supplies  of  labor  products 
will  never  exceed  the  demand ;  because  as  the  de- 
mand slackens  men  will  turn  naturally  to  other 
occupations  and  will  have  all  they  make  them- 
selves available  to  exchange   for  what  others 


MONEY   MAKING  250 

IN    FREE    AMERICA 

make.  Unless  we  see  clearly  that  under  natural 
conditions  the  demand  for  labor  products  will  al- 
ways be  equal  to  the  supply,  we  will  not  see 
the  uselessness  of  a  tariff.  But  if  we  get  a  grip 
on  the  principle  that  all  demand  for  goods  is 
demand  for  labor,  we  will  understand  that  under 
no  circumstances  can  law^s  that  raise  prices  or 
that  shut  out  imports  give  more  opportunities 
for  work.  They  may  set  some  men  to  w'ork 
making  blankets  or  glass  who  would  otherwise 
grow  wheat  or  raise  truck,  but  they  cannot  in- 
crease the  sum  earned  by  labor. 

"  But,"  it  is  urged,  "  a,  tariff  on  imported 
goods  enables  us  to  use  manj'-  of  our  natural 
products  that  it  would  not  otherwise  pay  to  use." 
Maybe  so;  but  we  know  a  simpler  and  more  nat- 
ural way  to  open  up  those  opportunities  for 
work.  It  is  to  remove  the  restrictions  and  mo- 
nopolies that  keep  them  shut  up. 

I  am  not  going  to  balance  here  the  amounts 
taken  in  tariff  taxes.  You  may  be  getting  back 
in  your  own  prosperity  all  that  the  tariff  costs 
you.  Even  if  not,  it  is  only  one  of  your  tax 
burdens. 


251  MONEY   MAKING 

IN    FREE    AMERICA 

Of  course  you  know  that  when  a  business- 
man pays  the  tax  on  his  building,  it  increases 
the  cost  of  the  goods  made  or  sold  in  it,  and  he 
adds  the  tax,  with  a  profit  for  collecting  it,  to 
the  price  at  which  he  sells  the  goods;  or,  if  he 
lets  the  building,  he  adds  it  to  the  rent.  In  the 
same  way  when  merchants  pay  a  personal  tax 
or  an  internal  revenue  or  an  import  tax  on  goods 
made  here  or  coming  into  this  country,  they  add 
the  tax  to  the  price  at  which  the  goods  are 
sold. 

If  they  cannot  get  that  price,  importation  or 
manufacture  stops,  because  it  is  then  unprofit- 
able. 

Said  the  late  Thomas  G.  Shearman,  a  wealthy 
and  conservative  lawyer  and  statistician:  "To 
call  the  general  average  of  mercantile  profits  be- 
fore the  consumer  is  reached  only  15  per  cent,  is 
ridiculously  low.  No  estimate  of  which  the 
writer  is  aware  puts  it  lower  than  25  per  cent. 
(Geo.  B.  Waldron  estimates  it  at  37 J  per  cent.) 
Nevertheless,  the  lowest  conceivable  figures  shall 
be  here  accepted.  The  profits  collected  upon 
local  taxes  on  buildings  and  goods  must  be  put 


MONEY   MAKING  269 

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still  lower.     Let  them  stand  at  only  five  per 
cent." 

On  the  basis  of  the  foregoing  explanations 
and  upon  the  census  and  other  official  statistics, 
Mr.  Shearman  constructed  the  following  table. 
We  bring  it  down  to  the  data  of  the  census  of 
1900: 

AMERICAN    TAX    BURDENS    OF    190O 
(Round   Numbers) 

Import    Duties    $    233,000,000 

Internal  revenue    295,000,000 

*  Increased    prices    of    domestic    protected 

goods     699,000,000 

$1,227,000,000 
Dealers'  profits,   15  per  cent 184,000,000 

$1,411,000,000 

t  Local  taxes $700,000,000 

Landlords'    and     dealers' 

profits,  5  per  cent 35,000,000        735,000,000 

Grand  total    $2,146,000,000 

*  This  item  is  based  on  the  extremely  conservative  estimate 
of  three  times  the  import  tax. 

■\  Estimated  by  increasing  the  census  report  of  1890  in  pro- 
portion to  the  increase  in  population.  In  the  States  where  com- 
parative figures  are  attainable  the  increase  over  the  1890  figures 
has  been  about  15  per  cent,  per  capita. 


253  MONEY   MAKING 

IN    FREE    AMERICA 

It  is  claimed  that  the  foreigner  often  pays 
the  duty,  because  he  has  to  sell  his  goods  cheaper 
in  order  to  get  them  into  our  market  at  a  price 
at  which  they  will  sell  with  the  amount  of  our 
tariff  added.  Doubtless,  this  is  sometimes  true 
when  the  profits  of  foreigners  are  extraordinary, 
so  that  they  can  afford  to  reduce  prices  on  ex- 
ported goods  and  still  make  money;  but,  as  we 
have  to  do  the  same  thing  in  order  to  get  our 
goods  into  their  protected  markets,  we  probably 
pay  as  much  as  we  get  that  way. 

We  are  told  that  we  must  "  stand  pat"  now; 
that  is,  make  no  material  change  in  the  tariff  or 
in  any  other  important  matter.  Then  these 
things,  whatever  may  be  said  against  them,  are 
as  perfect  as  restrictionists  can  make  them. 

Is  the  resulting  state  of  the  nation  satisfac- 
tory? If  so,  there  is  no  use  in  thinking  any  more 
about  it.  Yet,  in  some  respects  all  are  now 
agreed  that  we  should  have  material  changes  in 
our  import  duties:  in  trying  to  foster  some  in- 
dustries, we  have  hurt  others.  We  have  hurt 
even  the  farmer  by  bringing  droughts  consequent 
on  cutting  down  our  forests  to  make  protected 


MONEY   MAKING  254 

IN    FREE    AMERICA 

lumber  and  wood  pulp;  and  we  are  now  trying 
by  laws  to  counteract  the  evils  that  laws  have 
caused. 

Says  the  Bangor  News   (Rep.),  in  Septem- 
ber, 1908: 

"  There  is  a  belief  that  amounts  to  a  faith  right  here  in 
Maine  that  if  ground  wood  and  sulphite  pulp  were  ad- 
mitted from  Canada  free  of  duty  the  great  paper  trust 
would  have  to  reduce  the  price  of  white  paper  by  25  per 
cerrt.,  or  more,  which  would  curtail  the  senseless  slaughter 
of  sapling  spruces,  which  as  conducted  under  the  present 
system  is  a  shame  to  our  forestry  department.  It  is  freely 
conceded  that  the  pulp  and  paper  industries  are  of  great 
commercial  help  to  Maine.  But  the  method  of  cutting  is 
most  wasteful  and  if  continued  will  result  in  removing 
all  our  spruces  within  the  next  25  years.  It  is  not  the  duty 
of  the  voters  and  the  tax-payers  of  Maine  to  permit  the 
paper  trust  to  accumulate  enormous  riches  and  then 
abandon  the  wild  lands  of  Maine,  as  one  would  a  lemon 
that  has  been  squeezed  dry.  Retain  the  present  duty  on 
sawed  lumber  indefinitely,  but  open  the  bars  at  once  to 
Canadian  paper  material,  and  thus  cheapen  the  cost  of 
our  school  books,  our  Bibles  and  our  newspapers." 

Remember  that  at  no  time  in  the  past  forty- 
five  j^ears  have  we  had  a  tariff  averaging  less 
than  forty  per  cent.  Yet  we  have  frequently 
had  panics,  business  depression,  wage  reductions 
and  great  distress  during  that  period.     So  it  is 


255  MONEY    MAKING 

IN    FREE    AMERICA 

evident  that  the  sufficient  remedy  for  these  evils 
must  be  looked  for  elsewhere.* 

The  reader,  in  looking  over  this  tabula- 
tion, will  be  forced  to  one  conclusion,  which  is 
pretty  nearly  the  truth — that  although  changes 
always  make  some  disturbance  of  business,  times 
of  business  prosperity  and  depression  in  the 
United  States  have  never  borne  more  than  an 

*  From  Springfield  (Mass.)  Republican,  July  1,  lOO^: 
"  We  have  before  us  a  pamphlet  issued  by  the  American  Pro- 
tective Tariff  League  and  prepared  by  Francis  Curtis,  entitled 
'  Tariff  Hand  Book,'  which  tabulates  the  various  tariff  acts  of 
United  States  history  and  specifies  the  character  of  each,  whether 
protectionist  or  '  free  trade.'  This  list  may  be  accepted  as 
ofl5cial,  at  least  so  far  as  protection  tariffs  are  concerned.  Let 
us  accordingly  take  the  leading  enactments  back  to  1833  and 
note  the  general  business  conditions  which  prevailed  contempo- 
raneously : 

Act  of —  Character.  State  of  Business. 

1833 Free  trade.    Great  prosperity  up  to  1837;  then  panic. 

1842 Protection.      Fair  times. 

1846 Free  trade.    Good  times  as  a  rule  up  to  1857. 

1857 Free  trade.     Panic  followed  by  depression. 

1861-71.. Protection.      Great  prosperity   after   the   war. 

Panic   in    1873   and   hard   times. 

Hard   times    continued   to    1879. 

Depression    for   two   years. 

Good  times  up  to  panic  of  1893. 

Hard  times. 

Good  times  up  to  1903. 

"There  can  be  no  dispute  about  the  sort  of  times  in  business 
which  followed  the  low  tariff  of  1833,  and  if  panic  succeeded  in 
1837  it  tells  no  more  against  that  tariff  than  the  panic  of  1873 


1872.. 

. .  Protection. 

1875.. 

.  .Protection. 

1883.. 

. .  Protection. 

1890.. 

.  .Protection. 

1894.. 

. .  Free  trade. 

1897.. 

.  .Protection. 

MONEY   MAKING  256 

IN    FREE    AMERICA 

indirect  and  somewhat  remote  relationship  to 
tariff  changes. 

The  tariff  of  1909,  with  its  various  aggres- 
sions and  entrenchments  of  special  privileges, 
merely  confirms  and  emphasizes  what  is  said 
here.  As  we  go  to  press  the  practical  effects  of 
the  law  are  not  available  for  discussion,  while  its 
character  and  lack  of  any  principle,  except  the 
unprincipled  principle  of  strengthening  JNIonop- 
oly,  is  so  fully  discussed  in  the  public  press,  that 
it  has  been  deemed  unnecessary  to  examine  it 
here. 

We  are  dealing  with  economic  law,  not  merely 
with  laws. 

It  is  sufficient  to  say  that  "Nothing  is  ever 
settled  until  it  is  settled  right." 

tells  against  the  high  tariff  enactments  of  1861-72,  and  little 
more  than  the  present  reaction  in  business  tells  against  the  still 
higher  tariff  of  1897.  There  were  times  of  reaction  in  the  tariff 
period  from  1846  to  1857,  but  we  have  the  authority  of  Mr. 
Blaine,  in  his  history,  and  the  general  evidence  of  historians  and 
contemporary  records,  to  support  the  statement  made  in  the 
table. 

"  What  happened  from  1873  to  1879  under  tariffs  which  are  con- 
ceded by  the  Protective  Tariff  League  to  have  been  '  protection ' 
tariffs?  Times  of  panic  and  depression  worse  even  than  those 
of  1893-7;  and  for  proof  of  this  anyone  interested  is  referred 
to  Dun's  record  of  failures  relative  to  the  number  of  concerns 
in  business  for  the  two  periods."  (See  first  note  to  Chapter  xiv.) 


CHAPTER  XIX 

HOW  THE  FARMERS  CAN  BECOME 
PROSPEROUS 

T  N  early  times,  when  the  American  farmer 
-■•  raised  or  made  nearly  everything  he  used, 
his  welfare  depended  on  little  but  the  fertility 
of  his  farm  and  on  his  own  ability  and  energy., 
This  has  all  changed,  and  the  farmer  now  sells 
almost  all  his  crops,  and  has  to  buy  goods  manu- 
factured in  towns  and  cities.  In  years  of  large 
production,  prices  of  crops  often  fall  so  low 
that  there  is  no  profit  left,  or  that  there  is  an 
actual  loss,  so  that  it  no  longer  follows  that 
abundant  crops  mean  good  times  for  the  farmer. 
In  other  businesses  such  a  state  of  aifairs 
could  not  last  long,  for  men  would  not  continue 
to  produce  goods  to  be  sold  below  cost.  With 
the  farmer,  however,  there  is  little  choice.  He 
is  tied  down  to  the  land.  All  his  capital  is  in 
his  cattle,  machinery,  buildings,  improvements, 
and  such  things,  and  he  cannot  easily  sell  out 
and  try  some  other  occupation.    He  must  grow 

257 


MONEY   MAKING  258 

IX   FREE   AMERICA 

crops,  and  if  prices  are  low  he  must  grow  bigger 
crops  in  order  to  make  a  living.  Thus  each 
one  helps  to  glut  an  already  over-supplied  mar- 
ket. 

He  tries  diversified  farming;  instead  of  rais- 
ing only  corn  or  wheat  or  cattle,  he  grows  fruit 
or  vegetables,  sells  eggs  or  poultry,  or  makes 
cheese  or  butter.  But  try  as  he  may,  he  finds 
that  there  is  always  one  thing  lacking,  that  is,  a 
sufficient  market  for  the  things  he  has  to  sell. 
He  asks  for  protection  to  give  him  a  "  home 
market "  for  his  products,  though  he  has  learned 
by  bitter  experience  that  the  "  home  market " 
is  not  enough.  As  fast  as  villages  grow  into 
towns,  and  towns  into  cities,  their  needs  are  more 
than  supplied  by  the  surplus  stock  of  ten  mil- 
lion farmers  and  farm  laborers,  who  by  modern 
systems  of  transportation  are  enabled  to  ship 
to  all  parts  of  the  country.  No  matter  how 
great  the  cities  grow,  the  supply  of  food  stuffs 
of  all  kinds  keeps  far  ahead  of  what  the  people 
can  buy.  Greater  New  York  and  adjoining 
towns,  for  instance,  have  a  population  of  over 
4,500,000.    Yet  down  on  Long  Island  and  out 


259  MONEY   MAKING 

IN   FREE    AMERICA 

in  New  Jersey,  within  an  hour's  ride  of  this 
immense  number  of  people,  there  are  farmers 
who  can  hardly  make  a  living  by  cultivating  the 
soil  on  which  fruit,  vegetables,  and  such  things 
can  be  raised  in  abundance.  It  is  true  that  there 
is  nearly  always  a  market  for  the  finest  fruits 
and  vegetables  to  be  sold  to  the  rich ;  in  the  same 
way,  there  is  nearly  always  a  place  for  the  man 
or  woman  of  unusual  ability. 

It  is  the  average  produce,  such  as  most  men 
must  raise,  and  the  average  man,  such  as  most 
men  are,  that  finds  the  markets  over-stocked. 

This  does  not  mean  that  there  is  any  real  lack 
of  a  market  for  all  that  the  farmers  could  pos- 
sibly produce.  The  very  best  markets  for  farm 
products  exist  wherever  there  are  manufactur- 
ing industries  or  commercial  centers.  The  mil- 
lions of  workers  in  the  factories,  mines  and 
lumber  woods,  or  on  railways  and  steamships, 
are  constantly  in  need  of  far  more  of  every- 
thing the  farmer  grows,  than  they  now  buy. 
They  do  not  buy  them  because  all  are  deprived 
of  a  large  part  of  their  wages,  and  many  are 
prevented  from  earning  any  wages  at  all.    The 


MONEY   MAKING  260 

IX    FREE    AMERICA 

"  wage-earners,"  who  buy  most  of  the  meat  and 
flour,  milk  and  eggs  and  butter,  do  not  get  near 
as  much  of  any  of  these  things  as  they  and  their 
famihes  want.  And  they  often  use  stale  prod- 
uce or  canned  goods,  which  they  would  reject, 
to  the  advantage  of  their  health  and  the  benefit 
of  the  growers,  if  they  could  afford  to  pay  for 
fresh  stuff. 

The  government  statistics  show  that  nearly 
half  of  the  income  of  the  working  classes  is 
spent  for  food.  Yet  everybody  knows  that  the 
most  of  these  now  stint  themselves,  and  that  as 
soon  as  anj^  one  of  them  gets  higher  wages,  he 
lives  on  a  better  scale  and  consumes  more  and 
a  greater  variety  of  foodstuffs. 

Ground  rent  alone  takes  from  the  four  mil- 
lions of  people  in  Greater  'New  York  at  least 
$180,000,000  each  year,  say  $45  each  for  every 
man,  woman  and  child.  This  sum  is  in  addition 
to  the  amoimt  of  ground  rent  which  now  goes 
into  the  public  treasury  through  the  real  estate 
tax — about  $65,000,000.*     If  industry  were  re- 

*  Calculated   by   Mr.   E.   L.    Ilejdcckcr  of  the   Department   of 
Taxes. 


261  MONEY    MAKING 

IN    FREE    AMERICA 

lieved  from  the  taxes  which  at  present  burden  it 
and  are  added  to  the  price  of  goods,  the  differ- 
ence in  cost  of  commodities  would  save  the  peo- 
ple of  New  York  a  sum  at  least  equal  to  the 
present  ground  rent.  Suppose  that  this  enor- 
mous sum  were  left  with  the  people  who  make 
it.  Would  they  not  be  able  to  buy  far  more 
things  than  they  do  now?  Of  that  $180,000,000 
probably  one-third  would  be  spent  directly 
among  farmers.  Another  third  would  be 
spent  for  manufactured  goods;  idle  workers 
would  then  be  able  in  turn  to  buy  the  food  stuffs 
for  lack  of  which  so  many  of  them  suffer. 

If  it  were  possible  (and  it  certainly  is  if  these 
people  themselves  abolish  the  laws  which  create 
monopolies)  to  double  the  wages  of  the  working 
men  and  women  of  America,  is  there  any  doubt 
that  there  would  follow  an  immensely  increased 
demand  for  the  farmers'  surplus  crops  ?  In  pro- 
portion as  the  workers  are  able  to  buy,  the  farm- 
ers are  able  to  sell.  This  is  so  evident  that  it  is 
a  wonder  the  farmers  do  not  see  that  their  in- 
terests lie  in  helping  their  natural  customers  to 
get  rid  of  those  who  live  on  the  community. 


MONEY    MAKING  362 

IN    FREE   AMERICA 

Of  course  the  farmer  is  also  shorn.  The  rail- 
road monopolies;  the  fostered  manufacturing 
monopolies;  the  patent  monopolies  and  the 
money  and  banking  privileges  take  away  a  large 
part  of  what  the  farmer  earns.  Before  real 
prosperity  can  come  to  the  farmer  we  must 
shake  off  all  of  these.  But  he  makes  a  mistake 
when  he  supposes  that  his  interests  are  differ- 
ent from  those  of  the  workers  of  the  towns  and 
cities.  For  the  sake  of  the  trifling  advantage 
which  some  farmers  get  from  the  ownership  of 
more  land  than  they  can  use,  but  which  they 
hope  to  sell  at  a  profit  some  day,  those  who  are 
asking  for  reforms  in  the  name  of  the  farmers 
generally  ignore  the  land  question.  It  will  not 
do.  The  millions  of  workers  who  under  free 
conditions  would  furnish  an  ample  market  at 
paying  prices  for  all  that  the  farmers  can  grow, 
cannot  prosper  until  the  monopoly  of  city  lands, 
coal  lands,  iron  lands,  and  timber  lands  is  abol- 
ished with  all  other  law-made  privileges. 

Farmers  who  hire  labor  often  think  that  be- 
cause they,  like  all  employers,  wish  to  pay  as 
little  wages  as  possible,  a  general  increase  of 


2G3  MONEY   MAKING 

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wages  would  be  an  injury  to  the  farming  inter- 
ests. This  error  must  be  got  rid  of  before  the 
farmers  can  secure  the  aid  of  other  workers  in 
their  struggle  for  freedom.  If  the  advance  in 
wages  were  general,  the  farmer  would  be  bene- 
fited by  an  increase,  even  though  he  had  to  pay 
more  for  hired  men;  for  the  greatly  increased 
purchasing  power  of  the  workers  in  the  cities 
and  industrial  centers  would  far  outweigh  his 
additional  outlay  for  help. 

There  is  one  way,  and  only  one  way,  in  which 
the  farmers  can  hope  for  relief.  That  is,  by  the 
establishment  of  a  system  in  which  all  workers 
shall  receive  the  full  reward  of  their  labor. 

Don't  worry  for  fear  that  you  may  have  to 
pay  a  trifle  more  to  your  hired  man.  It  will  all 
come  back  to  you,  and  far  more  with  it,  in  the 
added  value  of  your  own  labor  and  in  increased 
sales  and  the  better  prices  you  will  get. 

Study  this  over,  you  farmers  who  are  wonder- 
ing whether  it  wouldn't  be  better  for  each  coun- 
try to  shut  itself  in  with  a  wall  like  the  wall  of 
China  in  order  to  make  a  better  home  market. 
Consider  how  the  real  home  market  could  be 


MONEY   MAKING  ,  264 

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indefinitely  expanded  if  only  the  workers  were 
allowed  to  spend  their  full  wages  on  themselves, 
instead  of  giving  up  a  third  or  a  half  to  various 
law-created  parasites.  Think  what  it  would 
mean  if  all  those  who  are  now  idle,  or  working 
for  starvation  wages,  were  employed  at  good 
pay.  Wouldn't  there  be  a  rush  of  market  men 
and  commission  houses  for  farm  produce  w^ith 
which  to  supply  the  needs  of  these  people? 
Wouldn't  that  mean  flush  times  for  you,  and 
big  prices  for  your  crops?  Don't  you  see  that 
your  prosperity  depends  on  the  ability  of  the 
working  millions  to  buy  your  products,  and  that 
the  way  to  sell  more  foodstuffs  is  to  help  the 
workers  to  get  more  wages? 

It  is  true,  as  we  are  often  told,  that  the  pros- 
perity of  the  whole  country  depends  on  the  con- 
dition of  the  agricultural  classes.  Unless  the 
farmers  can  buy  manufactured  goods,  the  work- 
ers cannot  get  employment,  and  business  is  at  a 
standstill.  But,  taking  one  year  with  another, 
the  farmers  always  have  crops  to  sell,  and  al- 
ways buy  some  goods.  A  reform  which  would 
enable  the  working  men  and  women  greatly  to 


fm  MONEY   MAKING 

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increase  their  purchases  of  farm  products, 
would  in  turn  enable  the  farmers  to  buy  far  more 
manufactured  ^oods.  Thus  trade  and  industry 
of  all  kinds  would  be  stimulated,  and  instead  of 
widespread  business  depression  we  should  have 
universal  prosperity. 

Says  Mr.  R.  T.  Snediker,  writing  from 
Kansas : 

"  Is  it  not  plain  that  a  system  which  forces  the  men 
who  feed,  clothe  and  house  us  to  give  up  two-thirds  of 
the  wealth  they  produce,  for  the  right  to  use  the  earth, 
will  cause  involuntary  poverty? 

"  A  little  over  a  year  ago  a  man  and  wife  with  seven 
children  went  onto  240  acres  of  land  in  Jackson  towrrship, 
Lyon  county,  Kansas,  and  agreed  to  give  $12,000  for  the 
tract  of  land,  including  about  $2,000  worth  of  improve- 
ments. This  man  and  his  wife  paid  down  in  cash,  from 
long  years  of  savings,  $1,000,  and  gave  a  mortgage  for 
$11,000  at  6  per  cent,  for  deferred  payment  of  rent.  You 
will  see  that  this  man  really  bought  $2,000  of  invested 
capital,  which  was  a  just  transaction,  and  $10,000  worth 
of  land  value,  or  deferred  payment  of  rent,  which, 
measured  by  the  natural  law,  is  a  jwverty-producing  trans- 
action. A  few  days  ago,  the  interest  on  this  $11,000 
became  due,  and  the  man — your  brother  and  mine — spent 
several  days  trying  to  borrow  the  money  to  pay  the  annual 
rent  by  mortgaging  his  wheat  crop  and  all  his  personal 
property. 


MONEY    MAKING  266 

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"  Look  what  a  burden  our  civilization  has  placed  on  this 
bread  winner  and  his  family.  What  real  capital  he  has 
borrowed  does  not  amount  to  over  $2,000.  But  we  force 
him  to  pay  $600.00  each  year  for  the  right  to  feed  his 
family.  He  is  compelled  to  pay  his  share  of  township, 
school,  county  and  State  taxes.  And  the  harder  he  works, 
and  works  his  family,  the  less  he  eats,  the  more  he  saves 
and  improves  his  land,  the  higher  will  we  tax  him. 

"  Then  he  is  forced  to  pay  his  share  of  $600,000,000 
government  tax.  Besides  that,  in  buying  lumber,  hard- 
ware, farming  implements  and  clothing  he  must  pay 
$125.00  more  per  annum  for  trust-made  goods  than  they 
sell  for  10,000  miles  from  home.  Last  but  not  least,  he 
must  pay  off  the  $10,000  deferred  payment  of  rent.  Now, 
under  this  contract  how  long  will  this  hard-working  family 
feel  the  sting  of  involuntary  poverty? 

"  The  man  is  57  years  old.  During  the  next  10  years, 
with  fair  crops  and  no  sickness  or  death,  he  may  reduce 
the  debt  $2,000  or  $3,000.  He  will  have  done  Avell  if 
he  does  that.  But  any  time,  from  failure  to  meet  a  de- 
ferred payment  of  rent,  the  man  and  his  family  may  be 
turned  out  of  house  and  home. 

"  The  land  will  irot  produce  a  bushel  of  wheat  or  corn 
more  to  the  acre  than  it  would  25  years  ago,  when  the 
writer  grazed  sheep  over  it  and  it  would  not  sell  for  $2.00 
per  acre. 

"  Don't  tell  me  that  the  above  story  is  an  exception.  I 
can  write  200,000  of  like  kind  in  Kansas.  Some  worse, 
some  not  so  bad,  but  yet  all  bad. 

"  This  story  is  a  plain  fact  very  plainly  stated.  The 
truth  is,  regardless  of  our  prosperity,  that  in  Kansas  we 
have  five  dollars  of  mortgage  for  every  one  we  had  twenty 


867  MONEY   MAKING 

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years  ago.  And  eighty  per  cent,  of  them  is  for  purchase 
money  of  land,  deferred  payment  of  rent — the  same  as 
the  Irish  tenant  pays  the  English  landlord." 

The  increasing  mortgages  are  often  explained 
as  being  for  land  purchases;  just  as  if  that  made 
them  an  evidence  of  prosperity  instead  of  an 
evidence  of  heavier  burdens.  Unless  he  sells  his 
farm  and  quits  farming,  the  speculative  advance 
in  farm  lands  is  only  a  hardship  to  the  farmer. 

There  is  no  mystery  or  theory  about  this.  The 
rise  in  prices,  due  mainly  to  the  vast  inci-ease  in 
the  supply  of  gold,  has  helped  the  farmers;  but 
unless  visages  rise  too,  the  purchasing  power  of 
mechanics  and  clerks  will  continue  to  fall,  and 
the  farmers  will  suffer  with  them.  Times  are 
hard  with  the  American  farmer  because  his 
land  costs  too  much;  because  he  has  been 
taxed  to  death;  because  he  has  to  pay  too 
much  for  the  goods  he  buys,  owing  to  unnatural 
exactions,  and  because  of  the  exactions  levied  by 
the  owners  of  the  sources  of  the  raw  material 
from  which  goods  are  made.  Good  times  will 
come  for  the  farmer  when  all  privileged  trusts 
have  been  wiped  out  together;  when  land,  man- 


MONEY   MAKING  268 

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ufacturing,  transportation  and  money  monopo- 
lies have  all  been  abolished  by  the  repeal  of  the 
laws  which  uphold  them;  and  when  the  workers 
are  allowed  to  retain  their  full  wapjes  and  to 
spend  them  as  they  see  fit.  This,  and  this  alone, 
will  bring  stead}'^  prosperity  to  the  American 
farmer. 


CHAPTER  XX 

WHAT  WE  WANT  AND  HOW  TO  GET  IT 

rri  O  replace  depression  with  prosperity;  to 
-*■  make  it  easy  to  get  a  living;  to  give  the 
workers  shorter  hours  and  the  full  results  of 
their  labor;  to  keep  the  few  from  filching  huge 
fortunes  from  the  many;  to  reduce  rents,  and 
to  make  this  nation  home  owners  instead  of  ten- 
ants; to  open  opportunities  for  work  to  all;  to 
raise  wages;  to  abolish  involuntary  poverty;  to 
free  men  from  the  demoralizing  strife  of  our 
one-sided  competition,  and  to  establish  a  true 
co-operative  commonwealth  of  free  association, 
one  thing  is  needed: — the  abolition  of  exclusive 
privilege. 

This  sounds  simple.  And  it  really  is  simjjle, 
so  plain  that  most  social  reformers  reject  it. 
They  want  something  complex — a  separate  rem- 
edy for  each  evil  of  our  social  system.  They 
want  laws  against  the  results  of  other  foolish 
laws.     They  think  that  regulation  and  restric- 

269 


MONEY    MAKING  270 

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tion  is  the  solution  of  the  problem  of  the  time. 
Until  they  discover  the  cause  of  the  disease  they 
seek  the  wron^  remedies. 

If  5^ou  have  followed  the  argument  of  this 
book  you  will  see  that  the  answer  to  the  question 
asked  on  every  side:  "How  can  we  abolish  in- 
justice?" is:  "By  repealing  the  laws  which 
create  injustice."  Not  by  building  up  a  cum- 
brous machine  of  regulation  of  industry,  but  by 
tearing  down  all  the  barriers  and  restrictions 
which  laws  have  set  up.  Not  through  govern- 
mental appropriation  of  all  business,  but  through 
the  abolition  of  interference  with  business. 

There  is  an  essential  difference  between  own- 
ership by  the  state  and  by  the  people.  The 
confusion  of  the  words  "  state "  or  "  govern- 
ment "  with  "  the  people  "  is  a  juggle  by  which 
a  great  many  persons,  perhaps  you,  have  been 
deceived. 

Because  the  state  represents  the  people,  it 
does  not  follow  that  for  the  state  to  take  posses- 
sion of  all  wealth  would  be  for  the  interests  of 
the  people.  The  "state  "  never  will  be  all  the 
people  until  we  have  an  ideal  society.    The  state 


271  MONEY   MAKING 

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is  nothing  but  an  organization  of  the  will  of  the 
most  forceful,  and  no  matter  how  the  interests 
of  the  rest  might  be  protected  by  law,  the  better 
organized  will  always  rule  the  less  organized  just 
as  those  engaged  in  the  great  businesses  of 
transportation  and  manufacturing  rule  them 
now.  That  this  must  be  so  in  all  communities 
based  on  authority  is  shown  by  Edward  Bellamy 
in  his  work  "  Equality."  Having  described  the 
workings  of  an  Utopian  republic  in  which  the 
government  w^as  the  owner  and  manager  of  all 
productive  industry,  he  explains  that  in  the  new 
order  it  was  found  that  some  people  objected 
to  the  commonwealth,  but  they  were  compelled 
to  resort  to  outside  reservations,  where  they  were 
supported  by  their  own  labor.  That  is,  after  all 
the  choice  farm  lands,  the  valuable  mineral  de- 
posits had  been  seized,  the  best  localities  for 
cities,  and  the  accumulated  wealth  of  the  past; 
the  individuals  who  did  not  like  the  regime  were 
to  be  kindly  permitted  to  go  outside  of  civiliza- 
ton  and  make  a  living  as  best  they  could.  Per- 
mission for  dissatisfied  people  to  go  off  some- 
where into  the  woods  or  mountains,  if  they  don't 


MONEY   MAKING  373 

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like  the  government,  is  not  the  freedom  which 
men  of  independent  spirit  want. 

Mr.  W.  J.  Bryan  has  said  a  great  deal  about 
monopolies  and  their  effects  in  producing  hard 
times.  He  has  vigorously  denounced  the  policy 
of  building  up  trusts  by  legislation,  and  has 
urged  the  people  to  unite  to  overthrow  those 
enemies  of  the  public  welfare.  Mr.  Bryan  has 
pointed  out  how  particular  monopolies  mulct  the 
wealth  producers,  and  has  shown  that  continu- 
ance of  present  conditions  must  end  in  the  great 
mass  of  people  becoming  virtual  slaves  of  the 
privileged  few.  But  when  it  comes  to  striking 
down  the  oppressors,  Mr.  Biyan's  remedy,  in 
spite  of  the  failure  of  laws  in  the  past,  is  more 
laws.  Mr.  Bryan  admits  that  monopolies  are 
the  creation  of  bad  laws,  but  he  never  demands 
the  repeal  of  those  laws.  He  thinks  that  we 
need  only  more  laws  against  trusts,  or  the  better 
enforcement  of  the  present  laws.  And  Mr. 
Bryan  is  like  most  other  anti-monopolists.  They 
would  like  to  do  something,  but  don't  know  just 
how  to  go  about  it.  They  repeat  the  Jeffer- 
sonian  principle  of  "  equal  rights  for  all;  special 


273  MONEY    MAKING 

IN    FREE    AMERICA 

privileges  to  none,"  while  they  demand  favors 
for  some  particular  interests  and  classes.  They 
denounce  class  legislation,  but  have  little  idea 
of  a  society  without  such  legislation.  There- 
fore the  rich  and  strong  laugh  at  their  trumpery 
laws. 

More  laws?  Oh,  yes,  you  can  have  more  laws; 
but  the  daily  walk  and  conversation  of  a  citizen 
of  New  York  is  regulated  now,  as  nearly  as  can 
be  counted,  by  twenty-one  thousand  two  hun- 
dred and  sixty  laws,  besides  unnumbered  ordi- 
nances of  Bureaus  and  Commissions.  The 
meaning  of  these  laws  is  clearly  and  briefly  set 
forth  in  about  eight  hundred  current  law  text 
books,  and  further  illuminated  by  the  judges  in 
several  thousand  "leading  cases." 

You  see  "  the  law  is  a  game  played  by  us  law- 
yers, under  complicated  rules,  made  by  ourselves, 
for  our  own  benefit  at  the  expense  of  the  public." 

But  when  these  laws  are  in  the  way  of  those 
who  alone  take  a  continuous  interest  in  elections 
and  legislation,  we  have  them  all  set  aside,  as  in 
Colorado.  You  will  find  an  account  of  that  in 
the  Public  of   Chicago  for  June   11th,   1904. 


MONEY    iMAKING  274 

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The  constitution  of  Colorado  forbids  martial 
law;  but  the  Supreme  Court  of  that  State  has 
decided  that  the  Governor  can  declare  any  part 
of  the  State  to  be  in  "insurrection,"  put  the 
military  in  charge,  arrest  anyone  he  pleases, 
have  anyone  shot  or  hung  whom  he  designates, 
and  that  the  courts  have  no  power  through  ha- 
beas corpus  proceedings  or  otherwise  to  inter- 
fere with  the  Governor.  This  isn't  "  martial 
law,"  of  course,  because  the  "  insurrection " 
proclamations  have  been  issued  at  the  demand  of 
the  corporations  to  whom  the  Gk)vernor  owes 
his  election. 

There  are  men,  some  of  whom  call  themselves 
"  physical- force  Anarchists,"  who  think  that  the 
people  can  be  freed  onlj^  by  violent  revolution. 
Against  this  idea,  the  Chicago  Freie  Presse,  a 
paper  which  defends  many  of  the  Populist 
views,  has  said: 

"  Occasionally  we  hear  our  fellow  citizens  say: 
*If  misgovernment  continues,  only  a  new  revo- 
lution can  help  us.'  We  are  glad  to  see  that 
Governor  Altgeld  opposed  this  view\  He  said 
that  revolution  cannot  bring  improvement;  it 


375  MONEY   MAKING 

IN    FREE    AMERICA 

would  mean  only  that  we  will  have  more  cruel- 
ties, more  police,  more  soldiers;  more  despotism 
imder  the  mask  of  fine  phrases. 

"  A  rebellion  is  justifiable  only  when  the  peo- 
ple cannot  make  known  their  will.  In  that  case 
force  must  meet  force  to  bring  forth  improve- 
ment. But  in  the  United  States  there  is  no  ne- 
cessity for  this.  The  result  of  the  elections  has, 
so  far,  always  been  accepted  as  decisive,  how- 
ever much  that  result  may  have  been  brought 
about  by  underhand  methods.  Though  the  elec- 
tions have  been  influenced  very  frequently  in  a 
manner  which  verges  on  the  illegal,  it  must  be 
admitted  that  all  parties  have  taken  their  turn 
in  this  mode  of  '  assisting  the  public  will  to  de- 
clare itself.' 

"As  long  as  the  suffrage  is  not  curtailed,  a 
violent  rising  against  the  results  of  an  election  is 
fooHsh.  The  people  have  a  right  to  make  their 
vnll  known  through  the  secret  ballot.  The  re- 
sult of  the  elections  often  does  not  please  us,  but 
that  result  is,  on  the  whole,  in  accord  with  the 
common  sense  and  honesty  possessed  by  the  vot- 
ers.    If,  for  instance,  some  Chicago  wards  con- 


MONEY   MAKING  376 

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tinue  to  elect  boodle  aldermen,  we  think  that  the 
electors  are  no  better  than  the  elect,  and  that 
boodlers  are  their  fit  representatives. 

"A  revolution  would  change  nothing.  The 
people  cannot  get  additional  liberties.  After  a 
revolution,  as  before  it,  they  cannot  do  more 
than  elect  their  representatives  and  officials, 
and  there  is  no  reason  to  suppose  that  they 
would  choose  more  honest  and  able  men  than 
now. 

"  If,  on  the  other  hand,  an  unjustifiable  in- 
surrection were  to  be  crushed  by  force,  the  vic- 
torious reactionaries  would  punish  the  rebels 
with  bloody  rigor,  the  army  would  be  increased, 
the  welfare  and  freedom  of  the  people  would  be 
reduced  in  the  name  of  public  safety.  It  would 
be  nonsense  for  the  people  to  rebel  against 
themselves  as  long  as  the  suffrage  remains  and 
the  result  of  an  election  is  respected." 

So  you  need  not  be  alarmed  about  the  will  of 
the  people  being  defeated  bj^  force  or  fraud. 
There  is  in  America  but  a  small  standing  army, 
composed  of  ourselves;  that  will  not  long  help 
to  sustain  injustice.     Governments,  courts,  mili- 


977  MONEY   MAKING 

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tia  and  police  will  all  obey  the  orders  given 
them  by  representatives  of  the  people,  just  as 
soon  as  the  people  elect  men  who  truly  represent 
them. 

If  you  see  that  the  long  train  of  evils  can  be 
quickly  abolished  by  the  repeal  of  laws  that 
create  and  maintain  the  evils,  we  have  next  to 
consider  how  we  can  best  bring  this  about.  You 
will  find  ample  evidence  that  the  great  majority 
of  Americans  are  profoundly  discontented  with 
present  conditions  and  are  anxious  for  some 
great  change.  The  people  are  slowly  awaking 
to  their  folly  in  allowing  themselves  to  be  ex- 
ploited, and  it  will  not  be  long  before  that  dis- 
content will  somehow  find  practical  expression. 
The  Presidential  campaigns  since  1896  show 
that  economic  questions,  the  problems  of  a 
larger  production  and  fairer  distribution  of 
wealth,  will  be  the  controlling  issues  in  politics 
in  the  future. 

A  contest  is  coming  when  political  parties  will 
be  broken  up  and  the  struggle  will  be  between 
the  exploited  on  the  one  side  and  the  exploiters 
with  their  supporters  on  the  other.     We  must 


MONEY    MAKING  278 

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open  men's  eyes,  so  that  they  shall  see  on  which 
side  they  really  belong.  In  the  excitement  of 
a  campaign  it  is  hard  to  make  converts. 

Here  is  where  we  must  do  our  part.  Not 
someone  else's,  but  our  owoi  part.  We  must  in- 
sist, in  season  and  out  of  season,  that  the  way  of 
escape  from  the  ills  of  which  Democrats,  Re- 
publicans, PopuHsts,  Prohibitionists,  Socialists, 
Independents,  and  all  others  complain,  is  through 
the  repeal  of  class  legislation.  No  matter  how 
attractive  any  other  policy  may  appear ;  no  mat- 
ter how  plausible  the  arguments  for  this,  that, 
or  the  other  subsidy,  or  for  "  constructive " 
schemes  of  society,  we  must  stick  to  the  one  de- 
mand for  the  abolition  of  privilege.  We  will 
be  told  that  our  proposal  is  purely  negative, 
that  the  people  will  never  support  a  merely  "  de- 
structive "  policy,  and  that  we  must  have  a  cut- 
and-dried  plan  for  reorganizing  societ}'^  before 
we  can  get  a  following.  We  will  meet  with  de- 
mands that  wealth  taken  from  its  makers  should 
be  subjected  to  income  or  inheritance  taxes  in 
order  that  a  small  portion  of  it  may  be  recov- 
ered; that  privileges  given  to  one  should  be  ex- 


g79  MONEY   MAKING 

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tended  to  another,  that  farmers  should  now  get 
their  share  of  favor  by  legislation. 

Against  all  these  objections  we  must  main- 
tain this  clear  and  definite  proposition:  that  the 
way  to  abolish  monopoly  is  to  repeal  all  monop- 
oly laws.  The  natural  order  of  society  is  much 
wiser  and  better  than  any  human  device  or  state- 
regulated  system. 

Do  not  be  afraid  that  freedom  will  intensify 
competition.  We  cut  one  another's  throats  only 
in  want  or  fear.  Even  the  rats  eat  one  another 
only  when  they  are  starving  in  the  trap. 

Men  desire  to  help  one  another;  they  wish  to 
compete  in  that;  they  trample  on  their  fellows 
only  when  they  are  penned  in  or  when  the  panic 
of  the  crowd  prompts  each  to  save  himself. 

Mankind  has  never  had  anything  like  free- 
dom yet.  The  despotism  of  the  patriarch  has 
been  succeeded  by  that  of  the  chief  or  the  priest; 
then  came  robber  barons  and  kings  ruling  the 
land,  and  latest  is  the  landlord  and  his  laws. 

Superstition,  slavery,  custom,  law,  are  but  the 
steps  by  which  we  rise  toward  Liberty. 

Let    the    government    confine    itself    to    its 


MONEY   MAKING  280 

IN   FREE   AMERICA 

proper  business  of  preserving  the  peace,  the 
equal  rights  and  personal  freedom  of  the  peo- 
ple, and  stop  interferences  with  production  and 
business.  Abolish  the  foolish  laws  which  pre- 
vent men  from  working  on  unused  land  or  which 
keep  them  from  exchanging  their  products  as 
they  wish  or  from  using  the  best  methods  of 
credit  and  exchange,  and  a  social  order  will  be 
evolved  higher  than  has  ever  been  dreamed  of. 

Congressman  Robert  Baker  asks: 

"Why  the  depression,  why  the  blight?  This  'marvel- 
ous '  prosperity  seems  to  have  been  wonderfully  efficacious 
in  keeping  the  toilers  poor.  This  unprecedented  prosper- 
ity seems  to  have  been  monopolized  by  a  few.  They  have 
gone  on  piling  up  millions,  but  the  larders  of  the  workers, 
it  seems,  have  accumulated  nothing,  so  that  they  now  face 
starvation  as  their  reward  for  the  part  they  took  in  pro- 
ducing '  widespread  '  prosperity.  The  bottom  has  dropped 
out  of  their  '  full  dinner  pail.' 

"  Again  we  ask  why  ?  You  say,  *  Regardless  of  politics, 
once  the  manufacturers  of  this  country  join  universally 
in  this  movement,  depression  will  cease.'  Wlio  are  they 
to  sell  to.''  How  can  the  masses  buy  when  their  savings 
are  gone?  With  wages  reduced,  how  are  they  to  pay 
monopoly  prices  and  yet  live?  How  are  you  going  to 
bring  prosperity  to  the  toiler  without  destroying  monopoly 
and  special  privileges?    Using  the  force-pump  won't  alter 


281  MONEY   MAKING 

IN    FREE    AMERICA 

conditions,  the  people  want  something  more  than  wind. 
Why  not  prick  the  monopoly  bubble,  let  out  some  of  the 
wind  and  water,  bring  the  necessaries  of  life  within  the 
purchasing  power  of  the  people.  The  crop  of  millionaires 
may  not  grow,  but  an  equitable  distribution  of  the  wealth 
produced  according  to  the  part  that  each  has  coniributed 
to  its  production  will  bring  happiness  to  millions  and 
insure  a  natural — therefore  lasting — instead  of  the  *  force- 
pump  *  prosperity  you  propose. 

"  Let  us  clip  the  talons  of  monopoly,  uproot  special 
privilege,  and  economic  conditions  will  improve  so  mightily 
that  all  will  be  able  to  enjoy  the  comforts  of  life  and  none 
will  have  to  toil  such  long  hours  that  life  becomes  a 
burden." 

Events  may  show  some  other  weak  point  to 
be  assailed  or  some  other  means  to  use,  but  at 
present  the  best  weapon  with  which  we  can  be- 
gin to  abohsh  privilege  is  the  taxing  power.  All 
the  valuable  privileges  and  franchises  having 
been  foolishly  given  away,  it  would  be  an  almost 
hopeless  or  at  least  a  tedious  task  to  recover 
them.  In  addition  to  public  ignorance  and  in- 
difference, there  is  the  barrier  of  "  vested  rights," 
which  is  always  brought  up  against  any  proposal 
for  restitution.  Even  though  State  and  national 
legislatures  should  pass  laws  restoring  what  has 
been  taken  by  force  or  fraud,  the  courts  would 


MONEY    MAKING  299 

IN    FREE    AMERICA 

declare  these  laws  "  unconstitutional,"  on  the 
ground  that  they  violate  contracts  between  the 
government  and  certain  citizens.  Until  the  Con- 
stitution can  be  amended,  or  the  laws  construed, 
so  as  to  allow  us  to  revoke  unjust  and  fraudu- 
lent contracts,  the  great  bulk  of  public  fran- 
chises now  in  private  hands  cannot  be  recovered 
without  payment  of  the  exorbitant  sums  that 
these  franchises  now  command. 

For  the  cities.  States,  or  national  government 
to  buy  up  all  franchises  at  their  present  market 
value,  a  value  not  given  them  by  the  labor  or 
ability  of  their  owners,  would  be  to  load  them- 
selves with  debt,  the  interest  on  which  might 
nearly  equal  what  is  now  paid  the  franchise  grab- 
bers. The  change  from  paying  enormous  prices 
for  goods  or  services,  to  paying  enormous  sums 
as  interest,  would  not  be  much  advantage.  Wall 
Street  would  pocket  interest,  instead  of  divi- 
dends, and  the  public  would,  as  now,  pay  the  bill. 

But  it  is  not  necessary  to  take  possession  of 
all  these  franchises  and  privileges  in  order  that 
their  values  should  go  to  those  whose  work  and 
presence  create  them. 


983  MONEY   MAKING 

IN   FREE    AMERICA 

Taxation  is  another  and  easier  way.  Through 
it  all  excessive  profits  can  be  taken  for  the  city, 
State  and  nation.  Our  whole  present  system  of 
taxation,  based  on  taxing  wealth  and  consump- 
tion, is  bad.  As  taxes  on  goods,  houses  and  such 
things  are  paid  by  the  consumer  in  the  end, 
our  taxes  fall  most  heavily  on  the  farmers  and 
other  workers.  And  no  matter  how  much  tax 
is  collected  from  rich  owners  of  factories,  stores, 
or  transportation  companies,  these  taxes  are  in 
the  long  run  paid  by  the  ninety-five  per  cent,  of 
the  people  who  are  not  rich. 

But  put  the  tax  on  privilege;  that  is,  on  ex- 
clusive rights  granted  to  certain  persons  to  oper- 
ate railways,  telegraphs  and  telephones;  to  lay 
,  gas  mains ;  to  mine  coal  or  cut  timber  on  certain 
pieces  of  land,  or  to  occupy  the  most  desirable 
locations  for  manufacturing,  business,  farming 
or  residential  purposes. 

A  tax  on  privilege  means  that  the  holder  of 
the  privilege  must  pay  to  the  people  the  value 
of  the  privilege  granted.  This  is  a  plain  propo- 
sition, and  plainly  fair  and  just. 

Such  a  tax  cannot  possibly  be  shifted  to  con- 


MONEY   MAKING  284 

IN    FREE    AMERICA 

sumers  because  the  holder  of  the  franchise  which 
we  tax  is  already  getting  all  the  public  can  pay 
for  his  services  or  goods.  Prices  therefore  can- 
not be  increased  to  cover  the  additional  tax, 
without  reducing  sales  or  patronage,  with  a  con- 
sequent loss  of  profits. 

Another  reason  why  taxes  on  privileges  can- 
not be  shifted  is  because  such  taxes  operate 
to  open  up  fields  for  freer  competition.  Our 
present  system  encourages  holding  land  out  of 
use,  by  levying  little  or  no  taxes  on  valuable 
lands  kept  idle  for  speculative  purposes.  If 
all  these  privileges  in  vacant  lands  were  taxed 
to  their  full  value,  the  holders  would  have  either 
to  put  the  lands  to  some  productive  use,  or  let 
someone  else  use  them. 

In  either  case  the  opportunities  for  labor  and 
the  consequent  production  of  goods  would  be 
vastly  increased. 

Since,  then,  it  is  a  question  of  raising  taxes 
either  from  consumption  or  from  privilege,  we 
should  get  the  tax  laws  of  our  cit5%  county  or 
State  changed  so  that  all  the  taxes  will  be  levied 
on  those  who  have  law-made  advantages.    This 


285  MONEY    MAKING 

IN    FREE    AMERICA 

will  produce  the  quickest,  most  far-reaching  re- 
sults in  the  war. 

The  power  to  tax  is  the  power  to  destroy. 
Agitate  this,  and  we  will  accomplish  something 
definite  right  here  and  now — not  in  a  far-off 
millennium.  In  some  States  they  are  doing  this 
now.  We  read  a  special  dispatch  to  The  Even- 
ing Post:  "  Chicago,  June  21.  The  railroad 
assessment  question  seems  likely  to  become  as 
prominent  in  the  politics  of  Nebraska  this  year 
as  it  has  been  in  Wisconsin.  Efforts  to  lower 
rates  or  exercise  any  effective  supervision  over 
schedules  have  been  defeated  in  the  courts  or 
legislatures.  Recently  the  anti-railroad  move- 
ment has  taken  the  form  of  a  demand  for  an  in- 
crease of  assessment  on  the  railroad  lines.  The 
railroad  companies  have  naturally  resisted  that 
attempt,  and  have  got  control  of  the  State  offi- 
cers. But  these  officers  became  so  alarmed  at 
the  strength  of  the  anti-railroad  movement  that 
they  have  met  the  demand  half  way.  At  a  meet- 
ing of  the  State  Board  of  Transportation, 
Edward  Rosewater,  editor  of  the  Omaha  Bee, 
led  the  reductionists  and  made  such  a  strong 


MONEY    MAKING  286 

IN    FREE    AMERICA 

presentation  of  the  case  that  the  board  raised 
the  raih-oad  assessments  65  per  cent.,  or  $19,- 
000,000.  This,  while  a  substantial  increase,  only 
whetted  the  appetite  of  the  Rosewater  faction 
for  still  larger  results.  The  immediate  effect  of 
this  action  by  the  Board  of  Transportation  on 
Mr.  Rosewater  was  the  defeat  the  foUowdng 
week  of  his  candidacy  for  delegate  to  the  Na- 
tional Convention,  but  Mr.  Rosewater  is  only 
stimulated  in  his  anti-railroad  crusade  by  that 
defeat." 


CHAPTER   XXI 

YOUR    OWN    SUCCESS 

A  GOOD  reputation,  a  good  wife,  and  a 
good  digestion  are  good  things,  and  tend 
to  content;  but  when  we  ordinary  mortals  speak 
of  success  we  mean  having  the  goods  on  us. 
Money  is  the  stuff  that  people  want.  It  can  buy 
leisure  for  those  who  have  brains  enough  to 
spend  it  that  way ;  it  can  buy  even  a  certain  sort 
of  freedom,  and  it  can  buy  attention,  high  living, 
and  in  fact  nearly  everything  except  the  thing 
which  is  worth  having. 

But  you  do  not  care  what  others  think  "  worth 
having " ;  you  know  what  you  want- — that  is 
money,  and  the  question  you  want  answered  is 
not  how  to  make  money,  but  how  to  get  money, 
for  if  you  depended  upon  what  you  made,  under 
present  conditions,  you  would  necessarily  die 
poor.  You  must  find  some  way  under  the  reign 
of  things  as  they  are  to  despoil  somebody  under 
the  form  of  law. 

287 


-^ 


MONEY   MAKING  288 

IN    FREE    AMERICA 

There  are  plenty  of  professors  who  are  hired 
to  explain  that  if  the  entire  wealth  of  the 
United  States  were  divided  up  there  would  be 
only  $1,275  for  each  of  us,  and  that  this  proves 
that  wealth  could  not  be  better  divided  than  it 
is  now.  What  it  really  does  prove  is  that,  as 
things  are  now,  he  who  would  be  rich  must  neces- 
sarily find  some  means  of  getting  more  than  his 
share  or  reaping  where  he  has  not  sown.  To  be 
sure  there  are  men  who  have  the  ability  alwaj'^s 
to  find  something  to  do  which  people  so  badly 
want  done  that  they  will  pay  for  it,  and  have  the 
further  ability  to  collect  for  doing  it  more  than 
it  is  worth. 

The  late  JNIarcellus  Hartley  used  to  say  to  me: 
"When  you  have  got  anything,  every  fellow  is 
trying  to  get  it  away  from  you.  The  only  place 
where  you  can  make  money  is  where  you  have  a 
monopoly."  Edison  made  money  not  out  of  his 
own  brains,  but  out  of  the  lack  of  brains  in 
others.  He  dazzled  the  people  with  his  electric 
lights  into  granting  his  companies  exclusive 
rights  to  string  wires,  which  privilege  has  brought 
him  millions  of  the  dollars  of  monopoly. 


289  MONEY    IVIAKING 

IN    FREE    AMERICA 

But  there  are  other  monopoHes  left  for  you 
and  me.  These  are  guarded  or  nursed  by  the 
tariff  laws,  by  patent  laws,  by  financial  laws, 
and  by  land  laws,  all  dear  to  the  hearts  of  the 
people;  and  if  we  are  going  reverently  to  bow 
to  the  shrine  we  will  have  very  little  chance  to 
assimilate  some  of  the  treasures  of  the  temple. 
So  let  us  make  a  little  review  of  these  monopo- 
lies. 

The  tariff  shields  the  farmer  a  little  and  the 
manufacturer  a  great  deal  from  the  competition 
of  the  world,  so  as  to  help  him  to  combine  with 
his  neighbors  to  wring  higher  prices  from  the 
consumxCr;  the  manufacturers  do  combine,  and 
the  farmers  do  too,  as  they  get  brains  enough. 

The  monopolies  coming  through  patents 
enable  men  to  keep  others  from  doing  things 
better,  because  those  who  find  their  profit  in 
doing  them  badly,  get  possession  of  the  patents. 

The  monopoly  of  money  is  only  a  m.ethod  of 
strengthening  those  who  are  already  strong;  for 
instance,  by  giving  a  privilege  of  free  coinage  to 
gold,  so  that  a  man  who  has  some  may  take  it  to 
the  mint  and  have  it  made  into  legal  tender  dol- 


MONEY   MAKING  390 

IN   FREE   AMERICA 

lars  free  of  cost.  This  ^ives  him  an  additional 
advantage  over  the  man  who  has  none.  Then, 
the  tax  of  10  per  cent,  on  all  notes,  intended  for 
circulation,  issued  by  others  than  national  banks, 
naturally  gives  the  national  banks  an  advantage 
over  anybody  else,  which  is  not  lessened  at  all  by 
the  special  privilege  that  they  have  of  sending 
their  bonds  to  the  treasury  and  getting  the  right 
to  issue  notes  against  them  without  losing  the 
interest  on  them. 

Railroad  and  street  car  promoters  and  re- 
organizers  also  make  enormous  sums.  But  the 
monopoly  of  land  is  the  mother  of  monopolies. 
One  or  more  of  these  is  necessary  for  him  who 
would  safely  get  rich  quick. 

In  order,  then,  to  succeed,  we  must  either  stand 
in  with  those  who  own  these  monopolies  or  else 
we  must  grab  some  for  ourselves. 

How  are  we  to  do  this? 

The  Sunday  school  books  tell  us  that  industry 
and  economy  and  faithfulness  and  a  number  of 
other  characteristics,  that  are  useful  in  slaves, 
will  make  us  rich.  The  big  corporations  are 
willing  to  pay  for  millions  of  copies  of  "  The 


291  MONEY    MAKING 

IN   FREE    AMERICA 

Message  to  Garcia  "  because  they  know  that  the 
harder  the  servant  works  the  richer  the  master 
is.  We,  however,  who  have  learned  to  think, 
can  see  that  if  only  one  man  works  an  hour  after 
time  or  is  quick  at  figures  he  will  so  far  sur- 
pass his  fellows;  but  when  all  are  willing  to  do 
the  same,  or  have  been  driven  by  want  to  do  the 
same,  so  that  they  all  stay  late  and  work  the 
calculating  machine,  none  of  them  will  get  any 
higher  wages  than  they  did  before. 

Our  State  subsidized  schools  can  do  no  less 
than  teach  that  education  will  lead  to  success. 
Stuff!  As  long  as  one  man  has  an  education 
and  the  rest  have  none,  he  will  be  successful  at 
their  expense,  but  when  everybody  has  it,  it  won't 
induce  monopoly  to  leave  them  any  more  of 
what  they  make  than  it  was  obliged  to  leave 
before. 

When  I  was  a  boy  any  foreigner  who  came  to 
New  York  could  get  a  teaming  job  at  the  usual 
rate,  but  truck  men  who  could  read  writing  and 
knew  how  to  write  got  better  pay  because  they 
were  worth  more.  To-day  men  who  cannot  read 
receipts  and  write  when  it  is  necessary  cannot 


MONEY    MAKING  293 

IN    FREE    AMERICA 

get  a  job  at  teaming  at  all;  but  the  scholar's  edu- 
cation does  not  enable  them  to  get  as  much  as 
their  fathers  got,  who  could  not  tell  a  J  from  a 
freight  hook. 

That  is  the  way  it  works  always ;  general  edu- 
cation does  not  enable  the  educated  to  get  more, 
but  makes  it  harder  for  those  without  education 
to  get  anything.  Education  is  all  very  well  in 
its  place,  and  if  you  have  a  monopoly  of  it  you 
can  make  a  fortune  out  of  that;  but  if  you  have 
not,  your  book-learning  is  not  in  it  at  all. 

Let  us  not  fool  ourselves  while  there  are  other 
people  to  fool.  The  way  to  succeed  is  not  to 
work,  but  to  work  the  workers ;  not  to  farm  the 
farms,  but  to  farm  the  farmers. 

Is  that  not  quite  evident?  A  laborer,  you 
know,  can  never  clear  even  a  competence.  At 
$25  a  month  and  board  and  lodging  a  servant 
cannot  save  $250  a  year.  At  that  rate,  he  or  she 
would  not  make  $30,000  in  100  years.  A  me- 
chanic M'ho  lost  no  time  and  never  bought  any- 
thing, if  he  worked  all  the  time  at  trade  union 
wages  would  not  make  $50,000  in  40  years. 
Meanwhile  he  would  have  to  guard  his  treasure 


293  MONEY   MAKING 

IN    FREE    AMERICA 

against  bunco  steerers,  financiers  and  bad  invest- 
ments, as  well  as  to  guard  his  heart  against  the 
cry  of  the  needy. 

Do  you  think,  then,  that  as  a  clerk  at  from 
$600  to  $1,500  a  year,  with  a  family  coming,  you 
are  going  to  get  very  rich  out  of  your  earnings? 

Doctors,  toothsmiths  and  plumbers  are  among 
the  best  paid  forms  of  labor  to-day,  first  because 
it  is  harder  to  check  off  their  work;  and  second, 
because  preparation  for  these  callings  does  really 
involve  hard  work.  But  it  is  only  the  smartest 
or  the  best  fakirs  among  them  that  get  the  high 
wages;  and  the  amount  of  work,  planning,  and 
wire  pulling  necessary  to  get  to  the  top  of  these 
professions  is  beyond  belief. 

"  Plenty  of  room  at  the  top  "  means  on  top  of 
you,  and  such  success  as  is  gained,  is  gained  by 
mounting  upon  the  bodies  of  those  who  have 
failed.  Habits  of  industry  are  all  right,  but  the 
best  habit  is  the  habit  of  thinking,  not  to  muse 
or  have  pipe  dreams,  but  to  think,  even  if,  as 
Dan  Beard  says,  "  thinking  does  hurt  the  head ; 
try  it  and  see." 

You  probably  won't.     John  Stuart  Mill  says 


MONEY   MAKING  294 

IN    FREE    AMERICA 

"most  persons  are  unwilling  to  undergo  the 
arduous  labor  of  thought." 

One  of  my  friends  was  counting  some  bonds 
one  daj^  when  the  President  of  his  company 
came  in.  He  said:  "What  are  3^ou  doing?" 
"Why,"  said  he,  "I  am  so  nervous  about  the 
number  of  these  bonds,  I  am  counting  them  over 
myself."  Said  the  President:  "  Go  over  there 
and  think  and  let  somebody  else  count  the  bonds. 
You  will  make  a  great  deal  more  money  thinking 
than  you  will  counting,  no  matter  how  well  you 
count." 

Think  where  you  can  get  some  sort  of  mo- 
nopoly. The  easiest  is  usually  to  get  a  piece  of 
land:  but  to  choose  it  wisely  is  a  matter  of  study. 
The  principles  are  all  considered  in  my  "  Three 
Acres  and  Liberty  " — where  it  should  be,  what 
sort  of  land,  how  to  make  use  of  it  so  that  it 
will  "  carry  itself." 

But  that  is  only  an  individual  salvation,  even 
when  it  is  successful:  this  book  is  written  to  set 
us  all  to  thinking  what  we  want  and  how  to  get 
it.  If  you  want  other  people's  money  do  not  be 
too  particular  about  how  you  get  it.    Slave,  make 


295  MONEY   MAKING 

IN   FREE    AMERICA 

use  of  your  acquaintances,  skimp,  gamble  with 
loaded  dice,  attend  the  leading  church,  marry 
rich,  invest  in  land,  overreach,  lie  in  with  the 
rich,  do  criminal  jobs  for  the  strong  who  will 
protect  you  from  the  courts,  make  yourself 
solid,  "  get  wisdom,"  the  skill  of  the  hands,  "  get 
knowledge,"  the  training  of  the  mind,  "  and  with 
all  thy  gettings,  get "  a  monopoly.  For  the 
higher  understanding  will  be  only  a  hindrance  to 
financial  success  under  present  conditions.  "  A 
tender  conscience  is  a  disqualification  to  success." 


CHAPTER  XXII 

THE  HOPE  OF  FUTURE  PROGRESS 

And  there  is  that  on  earth  which  no  tyranny  can  long 
suppress — the  people — the  power  and  future  of  the  peo- 
ple. Their  destiny  will  be  accomplished,  and  the  day  will 
surely  come  when  the  people — Samson  of  humanity — will 
raise  their  eyes  to  heaven,  and  with  one  blow  of  the  arm 
by  which  thrones  are  shattered,  burst  every  bond,  break 
every  chain,  overthrow  every  barrier,  and  arise  in  free- 
dom, masters  of  themselves. — Mazzini. 

r  I  ^HIA^GS  are  bad  enough  now.  Sometimes 
-*"  it  seems  as  if  they  were  getting  worse.  But 
not  even  in  the  Golden  Age  of  Labor  in  Eng- 
land* (which  was  before  the  common  lands  of 
that   country   were  enclosed   by  the  adjoining 

* "  I  have  stated  more  than  once,"  says  Professor  Thorold 
Rogers  in  his  great  work,  '  Six  Centuries  of  Work  and  Wages,' 
"  that  the  fifteenth  century  and  the  first  quarter  of  the  sixteenth 
were  the  golden  age  of  the  EngUsh  laborer,  if  we  are  to  interpret 
the  wages  which  he  earned  by  the  cost  of  the  necessaries  of  life. 
>\t  no  time  were  wages,  relatively  speaking,  so  high,  and  at  no 
time  was  food  so  cheap.  Attempts  were  constantly  made  to  re- 
duce these  wages  by  acts  of  parliament,  the  legislature  fre- 
quently insisting  that  the  statute  of  laborers  should  be  kept. 
But  these  efforts  were  futile,  the  rate  keeps  steadily  high,  and 
finally  becomes  customary  and  was  recognized  by  parliament." 

296 


297  MONEY   MAKING 

IN    FREE    AMERICA 

owners)  were  there  ever  in  the  history  of  the 
world  anything  like  so  many  persons  living 
safely  and  comfortably. 

It  may  be  that  there  were  never  so  many  out 
of  work.  Probably  there  were  never  so  many 
discontented.  But  those  out  of  work  can  read 
and  find  out  what  the  trouble  is,  and  will  vote 
right  when  we  stir  them  up  to  do  it. 

It  is  true  that  all  improvements  in  society,  in 
the  condition  of  the  country,  or  in  its  political 
methods,  chiefly  benefit  those  who  own  the  coun- 
try, by  raising  the  rent  of  land;  but  it  is  also 
true  that  the  landless  are  daily  growing  more 
and  more  dissatisfied.  It  is  true  also  that  dis- 
satisfaction with  things-as-they-are  is  increasing 
among  the  wealthy,  so  that  almost  all  rich  per- 
sons now  make  some  kind  of  attempt,  generally 
blundering,  to  make  things  better.  It  is  increas- 
ing even  more  among  the  middle  class,  mer- 
chants, manufacturers,  professional  men  and 
clerks,  who  were  hard  hit  for  the  first  time  by 
the  great  business  depression  which  began  in 
1893. 

Most  of  the  things  which  seem  so  discourag- 


MONEY   MAKING  298 

IN    FREE    AMERICA 

ing  are  either  the  result  of  indifference  to  public 
affairs,  born  of  a  past  state  of  such  comparative 
prosperity  that  men  cared  for  little  but  to  be  let 
alone ;  or  else  are  things  which,  bad  as  they  are, 
would  have  passed  unnoticed  a  hundred  years 
ago. 

When  free  land  was  easily  obtained  by  any- 
one, escape  from  oppression  was  so  easy  that 
suffering  was  often  unnoticed.  Now  the  indig- 
nation against  the  state  of  things  leads  to  pub- 
lishing details  of  the  hardships  of  the  coal 
miners,  for  instance,  or  to  exposure  and  discus- 
sion of  the  miseries  of  dwellers  in  the  slums,  till 
it  sometimes  seems  as  though  there  were  nothing 
but  suffering  and  misery. 

The  farmers  are  pushed  out  by  the  high  price 
of  land  to  a  distance  from  their  markets  in  the 
cities  and  even  from  the  towns;  there  they  are 
at  the  mercy  of  the  railroads.  The  farmer  is 
lonely,  without  amusements,  or  even  leisure,  ex- 
cept during  a  part  of  the  winter;  he  finds  the 
struggle  for  a  mere  living  hard,  while  for  most 
of  them  the  hope  of  getting  "  independent  rich  " 
has  long  passed  away. 


299  MONEY   MAKING 

IN    FREE    AMERICA 

The  workers  of  the  towns  and  cities  live  in  a 
constant  struggle  for  enough  wages  to  support 
themselves  and  families,  and  are  haunted  by  the 
dread  of  being  thrown  out  of  emploj'^ment.  They 
see  new  inventions  and  discoveries  vastly  increas- 
ing their  power  to  produce  goods,  but  they  get 
little  of  the  increased  wealth. 

Yet  in  spite  of  all  the  monopolies,  in  spite  of 
stupid  laws,  things  are  better  than  they  were. 
The  condition  of  some  of  the  workers  and  of 
many  of  the  farmers  has  been  gradually  improv- 
ing. There  are  far  more  hardships  than  there 
should  be,  but  the  Granges  and  the  Populist  agi- 
tation among  the  farmers,  and  the  widespread 
growth  of  the  labor  movement  show  that  the 
people  are  becoming  impatient. 

The  drowsy  giant  stirs — it  does  not  follow  be- 
cause he  has  been  sleeping  all  night  that  it  will 
take  him  all  day  to  get  up. 

The  corporations  and  other  privileged  classes 
seem  to  grab  everything  in  sight.  Yet  the  people 
have  begun  to  claim  a  larger  and  larger  share 
of  franchise  receipts,  and  the  formation  of  asso- 
ciations and  the  appearance  of  planks  in  nearly 


MONEY   MAKING  300 

IN    FREE    AMERICA 

all  political  platforms  demanding  governmental 
ownership  or  control  of  public  franchises,  shows 
that  the  people  are  at  least  awake  to  their  stu- 
pidity in  allowing  valuable  privileges  to  go  to 
private  owners.  This  is  very  different  from  the 
times  when  perpetual  franchises  and  other  mo- 
nopolies were  granted  without  even  a  protest,  to 
whoever  asked  for  them,  or  was  willing  to  buy  a 
City  Council. 

But  you  think,  perhaps,  that  if  we  made  any 
change  and  resumed  possession  of  our  property 
in  franchises  and  land,  we  would  only  substitute 
a  lot  of  plundering  politicians  and  office-holders 
for  a  few  plundering  plutocrats  and  bond- 
holders. 

Perhaps  so;  if  there  are  no  men  who  either 
wish  to  be  honest  or  whose  interest  can  be  made 
to  lie  in  honesty.  If  the  merchant  princes  can 
find  honest  men  to  serve  them,  the  sovereign 
people  can  find  honest  men  also. 

But  supposing  we  found  no  honest  men, 
would  we  be  less  robbed  by  men  whom  we  can 
punish  at  any  time  for  breach  of  their  trust  and 
whom  we  can  turn  out  at  the  next  election,  than 


301  MONEY    MAKING 

IN    FREE    AMERICA 

by  men  whose  only  Trust  is  for  their  own  benefit, 
and  over  whom  we  have  no  control  whatever? 

This  is  the  machine-made  argument  to  keep 
us  out  of  our  inheritance ;  to  say  that  we  are  too 
dishonest  to  own  it  and  consequently  must  leave 
it  with  the  monied  men,  who  have  all  the  honesty 
there  is. 

The  present  "  system  "  takes  all  that  the  people 
can  pay.    Could  a  new  system  take  any  more? 

But  men  are  not  bad  by  nature.  On  the  whole 
we  are  all  happier  doing  right,  unless  it  is  made 
an  object  or  a  necessity  to  us  to  do  wrong.  It  is 
pleasanter  to  be  honest  and  safe  than  to  be  dis- 
honest and  in  danger  of  punishment.  As  Robert 
Blatchford  says  in  "  Merrie  England  " :  "  Men 
will  do  right  for  its  own  sake ;  they  will  do  wrong 
only  for  the  sake  of  gain." 

One  of  the  chunks  of  wisdom  that  the  de- 
fenders of  special  privilege  hand  out  is  that  even 
the  poorest  workers  have  many  things  now  that 
not  even  the  rich  had  some  hundred  years  ago; 
and  they  add  that  the  reason  why  there  are  so 
many  dissatisfied  persons  in  the  world  is  that  we 
have  more  wants  than  our  ancestors.  This  is  true, 


MOXEY    MAKING  303 

IX    FREE    AMERICA 

but  its  bearing  is  just  the  reverse  of  what  the 
preachers  of  resignation  would  have  us  beheve. 
Men  have  progressed  in  civiHzation  precisely  be- 
cause they  had  more  wants  than  they  could 
satisfy  with  old  methods,  so  they  set  to  work  and 
devised  better  ways.  Now  that  industry  has 
reached  a  stage  where  it  is  possible  to  provide 
an  abundance  of  all  things  which  man  desires, 
it  is  only  natural  that  everyone  should  complain 
who  does  not  get  what  his  industry  and  skill 
produced. 

The  great  force  on  which  we  must  rely  for 
any  general  improvement  in  social  conditions,  is 
the  growth  of  popular  intelligence  under  the 
stimulus  of  awakened  desires,  and  not  the  un- 
selfish sentiments  of  the  rich  or  leisure  classes, 
nor  the  voluntary  letting  go  of  their  privileges 
by  the  favored  classes.  And  this  educational 
process  is  going  on  now  as  never  before;  the 
people  are  thinking  more  about  the  causes  of 
their  poverty  than  at  any  time  since  the  French 
Revolution  of  1789. 

You  have  been  warned  so  often  by  preachers 
and  professors  against  that  dreadful  thing,  '*  dis- 


303  MONEY   MAKING 

IN   FREE    AMERICA 

content,"  that  you  may  begin  to  wonder  if  tliis  is 
not  part  of  tliat  dangerous  doctrine  of  dissatis- 
faction. It  is.  I  appeal  to  your  discontent. 
There  was  never  a  man  who  amounted  to  any- 
thing unless  he  was  discontented.  You  ought  to 
be  discontented.  Without  divine  discontent 
progress  would  be  impossible.  The  hope  for  a 
better  civilization  lies  in  the  fact  that  the  people 
arc  discontented  and  are  trying  to  find  the  cure 
for  the  causes  of  their  discontent.  Don't  allow 
anyone  to  bluff  you  into  accepting  impositions, 
by  telling  you  that  you  are  only  one  of  the  dis- 
contented. You  ought  to  be  glad  that  you  have 
brains  and  pluck  enough  to  protest  against  the 
things  that  your  stupid  neighbors  submit  to 
without  a  murmur.  The  man  who  is  contented 
with  the  world  as  it  is  to-day  is  a  queer  kind  of 
spiritless  creature.  A  hog  lying  in  the  mud  is 
"  content."  But  that  animal  is  no  ideal  for  en- 
terprising men. 

Were  it  not  for  discontent,  men  would  still  be 
dwelling  in  caves  and  living  on  roots  and  clams. 
The  advance  of  mankind  through  all  the  ages,  in 
spite  of  periods  of  stagnation  or  reaction,  has 


MONEY    MAKING  304 

IN    FREE    AMERICA 

been  marked  by  a  wider  range  of  human  desires, 
and  a  growing  power  to  satisfy  their  desires. 
The  wide  gulf  between  the  Hottentot  and  the 
civihzed  American  is  the  gulf  between  dull  men 
of  few  wants,  and  men  whose  wants  are  many, 
and  who  know  how  to  satisfy  them. 

And  what  is  true  of  past  progress  is  also  true 
of  the  hope  for  the  future.  Conditions  of  living 
for  all  the  people  will  be  greatly  improved,  be- 
cause men  are  everywhere  becoming  more  dis- 
satisfied and  will  not  rest  until  there  is  a  change. 
The  desire  for  more  and  better  things  grows  on 
what  it  feeds  on,  and  as  past  progress  has  given 
us  many  advantages,  so  will  each  new  step  bring 
an  irresistible  demand  for  more  and  yet  more  of 
everything  we  need.  So  far,  the  problem  with 
which  men  have  been  concerned  has  been  mainly 
that  of  how  to  produce  wealth  in  abundance. 
That  problem  has  been  solved  by  inventive 
genius,  and  the  remaining  question  is:  How  can 
this  abundance  be  fairly  distributed?  Surely  the 
people  whose  intellect  can  work  such  wonders 
in  making  things,  will  not  fail  to  solve  the  ques- 
tion of  wisely  distributing  them  I 


305  MONEY   MAKING 

IN    FREE    AMERICA 

At  the  same  time  there  is  evidence  that  the 
anti-monopoly  sentiment  is  sufficiently  intelli- 
gent to  find  the  best  way  of  dealing  with  mo- 
nopolies, and  there  is  an  increasing  protest 
against  State  and  national  paternalism,  whether 
in  the  shape  of  subjection  of  women,  Sunday 
observance  laws,  or  laws  directly  favoring  some 
persons  at  the  expense  of  others.  We  are  rapidly 
learning  that  all  restrictions  on  trade  or  industry 
are  bad,  and  that  if  they  sometimes  appear  to 
be  good,  it  is  only  because  other  restrictions 
make  them  the  lesser  evil. 

The  most  encouraging  feature  of  modern  dis- 
content is,  however,  its  protest  against  the  idea 
that  one  set  of  men  is  better  or  more  deserving 
of  favors  from  the  government  than  others.  No 
longer  are  the  people  willing  to  agree  that  there 
is  by  nature  a  "  superior  class,"  which  should 
get  special  privileges  through  which  they  could 
make  great  fortunes.  As  the  New  York  Times 
calls  them,  the  "  JVIoney  Earners  "  have  begun 
to  question  the  "Money  Burners."  Men  ask: 
Who  is  Charley  Schwab,  that  he  should  get  pro- 
tection to  his  steel  industry  and  so  get,  nobody 


MONEY    MAKING  806 

IN    FREE    AMERICA 

knows  how  many,  millions  per  year?  Who  is 
John  D.  Rockefeller,  that  he  should  control  oil 
lands  and  railways  out  of  which  he  has  made 
perhaps  $1,000,000,000?  Who  is  WilHam  Wal- 
dorf Astor,  that  the  2,000,000  people  who  live 
and  work  on  JNIanhattan  Island  should  pay  him 
more  than  $125,000,000  for  the  privilege  of  liv- 
ing on  land  which  he  did  not  make?  These  and 
similar  questions  are  asked  daily  by  the  people. 
They  are  likely  to  be  answered. 

Some  men  believe  that  it  is  no  use  trying  to  do 
away  with  the  creation  of  special  favors  by  law, 
because  the  beneficiaries  control  the  government, 
the  courts,  the  army,  the  militia  and  the  police, 
and  that  even  if  the  people  voted  for  representa- 
tives pledged  to  repeal  such  laws,  those  who 
profit  by  them  would  never  allow  their  privileges 
to  be  taken  away.  This  is  a  short-sighted  view 
of  the  situation,  which  should  not  discourage 
anyone.  All  government,  no  matter  of  what 
kind,  rests  on  force.  Laws  may  be  made,  and 
courts  may  render  decisions,  but  unless  the 
people  wish  to  obey  them,  or  there  are  enough 
strong  men  to  compel  obedience  to  them,  they 


307  MONEY    MAKING 

IN   FREE    AMERICA 

will  be  of  no  effect.  The  Russian  despotism 
rests  on  the  apathy  of  the  Russian  peasant. 
Every  other  bad  government  exists  because  the 
mass  of  its  subjects  acquiesce. 

It  is  clear  that  there  can  be  only  such  a  gov- 
ernment as  the  strongest  of  the  people  want. 
This  strength  may  be  intellectual  strength,  which 
is  used  to  cajole  or  cheat  the  masses  of  the  people 
into  obeying  it,  or  strength  of  resources  like 
that  of  the  British  rulers  of  India.  But  strength 
of  some  sort  it  is.  The  majority  is  often  weak 
because  it  is  not  united  and  is  really  a  lot  of 
minorities.  And  just  as  soon  as  a  majority  of 
our  people  agree  on  any  poUcy,  they  can  have 
that  policy  carried  out. 

To  overthrow  the  gigantic  system  of  plunder 
from  which  we  suffer  we  have  to  contend  only 
with  the  "  Privileged  Classes."  How  many  are 
they? 

We  have  seen  in  Chap.  V.  that  4,000  families 
own  at  least  one-sixth  of  the  total  wealth.  On 
the  basis  of  calculations  made  by  Thos.  G.  Shear- 
man (in  "Natural  Taxation")  there  are  only 
500,000  families  with  incomes  exceeding  $5,000 


MONEY    MAKING  308 

IX    FREE    AMERICA 

a  year.  Charles  B.  Spahr,  associate  editor  of  the 
Outlookj  estimated  that  in  1890,  of  the  total  an- 
nual incomes  of  all  families,  nearly  one- fourth 
went  to  only  125,000  families.  More  wealth 
goes  to  a  smaller  number  of  families  now. 

It  is  this  handful  that  keeps  us  poor.  Trulj'' 
we  are  like  the  Israelites  when  they  were  held  in 
bondage  to  the  Egyptians,  and  the  Egyptians 
themselves  said :  "  They  are  more  and  mightier 
than  we."     (Exodus  1,  v.  9.) 

These  few  scattered  people  maintain  the  exist- 
ing state  of  things;  that  is,  we  heedlessly  main- 
tain it  for  them;  of  themselves  they  could  do 
nothing. 

Our  votes  elect  the  legislatures  who  give  these 
men  their  power.  Our  labor  creates  the  wealth 
which  these  men  take.  Our  authority  puts  these 
men  in  control  of  the  government,  the  courts, 
the  army  and  the  police.  ^It  is  our  fault  that 
this  handful  of  people  use  us  for  their  profit  as 
we  use  a  horse  or  a  mule.  Shall  we  keep  on  in 
the  same  old  rut  in  which  we  have  traveled  so 
long?  How  do  you  feel  about  it?  How  do  you 
like  it  as  far  as  you  have  got? 


300  MONEY    MAKING 

IN    FREE    AMERICA 

Perhaps  you  don't  like  it  a  little  bit.  Then  it 
will  not  be  hard  to  stop  it,  once  we  and  people 
like  us  are  determined;  not  nearly  so  hard  as  it 
was  to  turn  out  the  Republican  party  in  1892 
and  the  Democratic  party  in  1896.  Each  of 
these  parties,  a  little  before  each  election,  rep- 
resented a  majority  of  the  people  and  was 
thoroughly  organized  and  entrenched  in  office, 
with  spoils  to  hold  on  to  and  with  the  bright 
hope  of  more  to  come.  Some  of  the  leaders  had 
in  addition  the  fearful  looking  forward  to  of 
judgment  in  the  event  of  defeat,  such  judgment 
as  overtook  Boss  John  Y.  McKane.  Financial 
fat  was  fried  and  the  leeches  on  the  body  politic 
were  themselves  freely  bled  to  preserve  the 
blessed  state  of  things  as  they  were.  The  votes 
of  the  people  upset  the  whole  structure,  as 
Burns'  plow  turned  over  the  mouse's  nest.  But 
instead  of  carrying  out  their  pledges  of  1892, 
the  victorious  Democrats  did  little  or  nothing  to 
attack  monopoly.  The  result  was  that  in  1896 
the  opposition  gathered  again,  stronger  than 
ever,  and  won  a  victory  over  the  party  in  power 
which  had  forsaken  its  principles. 


MONEY   MAKING  310 

IN   FREE   AMERICA 

Whom  have  ^ve  to  contend  with  now?  Plu- 
tocracy is  in  control  of  the  pohticians,  and  it  is 
useless  to  expect  any  reform  *  through  them. 
Freedom  and  popular  interests  are  opposed  to 
paternalism,  privilege  and  corporate  plunder. 
Whatever  party  will  affirm  and  strengthen  its 
position  as  the  party  of  the  people  opposed  to 
monopolies  will  gain  a  sweeping  victory.  If  it 
again  falls  into  the  hands  of  the  tools  of  the 
great  corporations,  it  will  be  ignominiously  de- 
feated, and  it/ought  to  be  defeated.  In  a  re- 
generated party  standing  for  "equal  rights  to 
all  and  special  privileges  to  none  "  lies  the  hope 
for  progress. 

Patrician  or  plebeian,  Guelph  or  Ghibelline, 
Aristocrat  or  Jacquerie,  Tory  or  Liberal,  Con- 
servative or  Radical,  by  whatever  name  we  may 
call  them,  there  never  have  really  been  more  than 
two  opposing  parties:  the  supporters  of  privi- 
leges on  the  one  side  and  the  People  on  the  other. 
When  such  an  issue  is  squarely  presented  to  the 
American  people,  there  is  no  doubt  as  to  the 
result  of  the  fight  between  Slavery  and  Free- 
dom. 


APPENDIX 

ANNUAL  PRODUCTION  OF  WEALTH  IN 
THE  U.  S. 

Computed  from  the  Census  of  IQOO,  for  this  book  by 
A.  C.  Pleydell. 

The  census  shows  a  total  value  of  agricultural  products^ 
in  1889,  including  live  stock  and  animal  products  (less 
the  value  of  crops  fed  to  live  stock),  of.  .  .$3,742,000,000 
Deduct  for  those  used  as  raw  material  in 

manufacturing*      1,600,000,000 


Net  value  at  census  prices    $2,142,000,000 

The  value  of  manufactured  products  reported  in  1900 
was  over  thirteen  billion  dollars.  From  this  should  be 
deducted,  however,  to  avoid  duplication,  the  cost  of  goods 
purchased  in  partly  manufactured  form.  The  net  total 
given  by  the  census  for  manufactured  products,  including 
raw    material,    was $8,370,000,000 

But  these  two  items  for  agriculture  and  manu- 
factures show  only  a  part  of  the  annual  produc- 
tion of  material  wealth.    There  should  be  added 

*  Using  the  census  total  for  "  food  and  kindred  products," 
and  adding  to  it  the  value  of  tobacco,  leather  and  cotton  used 
by  the  manufacturers. 

311 


MONEY    MAKING  312 

IN    FREE    AMERICA 

the  value  of  buildings  above  the  cost  of  material 
used,  which  is  at  least  $500  for  each  one  of  the 
one  million  men  employed  in  the  building  trades. 
There  must  also  be  added  the  value  of  minerals 
not  used  as  raw  materials  in  the  manufactured 
products  above  reported,  of  which  coal,  gold, 
and  silver  are  the  most  important. 

The  Geological  Bureau  estimated  the  value  of 
all  mineral  products  in  1900  at  more  than  one 
billion  dollars.  But  anthracite  coal  is  estimated 
at  $2  a  ton,  which  is  all  that  it  should  cost  at 
retail,  whereas  it  costs  the  consumer  at  least  $6. 
Petroleum  (which  figures  in  the  manufacturing 
reports  also)  is  estimated  at  3  cents  a  gallon,  its 
cost  at  the  wells  probably;  but  the  consumer 
never  gets  it  for  less  than  10  and  generally  pays 
from  12  to  16  cents.  It  is  easil}^  seen  that  exact 
figures  cannot  be  given  in  computing  the  total 
product,  because  of  insufficient  and  misleading 
data.  But  the  census  errors  are  all  on  the  side 
of  making  the  value  of  products  small. 

Another  fact  must  be  considered  in  dealing 
with  the  country  as  a  whole.  For  a  fair  estimate 
of  the  value  of  the  wealth  annually  produced. 


313  MONEY    MAKING 

IN    FREE    AMERICA 

the  retail  prices  of  commodities  should  be  used. 
The  retail  price  is  the  final  worth  of  articles 
produced,  the  worth  made  by  the  labors  of  all 
the  working  population;  not  only  farmers  and 
factory  workers,  but  railway  employees,  clerks, 
salesmen,  and  others  like  them,  who  labor  in  get- 
ting things  to  the  people  who  finally  use  them. 
And  it  is  the  price  the  users  have  to  pay.  Of 
course  in  considering  the  ratio  of  wages  to  the 
value  of  product  of  any  one  class  of  employees, 
the  price  received  by  the  employer  for  the  goods 
produced  must  be  taken,  not  the  ultimate  or 
retail  value. 

The  census  figures  given  above  for  farm 
products  are  estimated  to  be  about  60  per  cent, 
of  retail   prices.*     Manufacturers'    prices   for 

*  Total  value  of  the  main  food  crops,  1899,  and  the  average 
value  per  bushel  according  to  the  census  returns;  also  the  value 
per  bushel  of  the  total  exports  of  cereals  for  that  year,  accord- 
ing to  the  U.  S.  Statistical  Abstract: 

Value  Census  value  Export  value 

total  crop.         per  bushel.        per  bushel. 

Corn     $828,000,000  31c.  40c. 

Wheat     370,000,000  56c.  74c. 

Oats     217,000,000  23c.  32c. 

Potatoes     98,000,000  36c.  not  given. 

Eggs    144,000,000  lie.  doz.       not  given. 

It  is  obvious  that  the  prices  at  which  exported  crops  are  sold 


MONEY   MAKING  314 

IN    FREE    AMERICA 

goods  are  certainly  not  over  60  per  cent,  of  the 
retail  prices.  The  census  figures  must  therefore 
be  increased  to  the  retail  prices  to  show  the  true 
values : 

Net  value  agricultural  products:— 

(Census   values,  $2^142,000,000 

Value   at   retail   prices    $3,570,000,000 

Net  value  manufactured  products: — 

(Census  values,  $8,370,000,000 

Value  at  retail  prices    $13,950,000,000 

Value   mineral    products    not    included    as 

raw  material,  more  than    $   1,000,000,000 

Value  of  buildings,  in  excess  of  material 

used    500,000,000 

Total    actual    value    of    the    annual    pro- 
duction  of   wealth   in    IQOO $19,020,000,000 

to  foreigners  show  their  value  to  the  nation  as  a  whole,  though 
their  value  to  the  farmer  is  only  what  he  gets  for  them.  But 
some  one  gets  the  difference.  Part  of  it  is  labor,  cost  of  trans- 
portation to  the  seaboard  and  other  legitimate  charges ;  part 
represents  the.  toll  exacted  by  the  owners  of  the  railed  highways 
and  others. 

The  4,500,000  consumers  in  and  around  New  York,  and  those 
of  other  large  cities,  pay  more  than  double  the  census  price  for 
potatoes  and  eggs,  taking  the  year  as  a  whole. 

The  census  says  (Vol.  5):  "The  value  of  the  [farm]  prod- 
ucts of  1899  was  greater,  in  all  probability,  than  that  shown  by 
the  reported  total,  which  consequently  fails  to  show  the  produc- 
tive power  of  labor  on  farms."  "  The  aggregate  of  such  omis- 
sions is  believed  to  be  not  less  than  6  nor  more  than  10  per 
cent,  of  the  total  reported  value  of  farm  products." 


315  MONEY    MAKING 

IN   FREE    AMERICA 

This  is  a  low  estimate  of  the  total  value,  as 
every  allowance  has  been  made  for  duplications ; 
and  it  has  been  compared  with  other  estimates. 

JMore  intricate  calculations  can  be  made,  in- 
volving subtractions  for  some  things  and  addi- 
tions for  others;  but  these  would  neither  ma- 
terially affect  this  estimate  nor  be  more  exact. 

Some  statisticians  have  estimated  the  "na- 
tional income "  by  calculating  the  totals  of 
wages,  salaries,  earnings  of  professional  men, 
and  so  forth.  But  because  of  insufficient  data 
such  calculations  are  merely  arbitrary  estimates. 

Besides,  though  wages  and  salaries  and  "in- 
comes" are  paid  in  money,  what  the  recipients 
want  and  ultimately  get  are  the  things  produced 
by  labor,  called  material  wealth,  of  which  money 
is  only  the  measure  and  evidence.  Even  when 
services  are  bought  with  money,  those  who  sell 
the  service  for  the  money  do  so  to  get  material 
things. 


FIVE    OTHER   BOOKS 
By  Bolton  Hall 

"Mr.  Hall  has  somehow  got  a  reputation  as  a  radical;  perhaps 
because  of  his  striking  way  of  saying  things  and  his  determina- 
tion to  be  heard;  but  his  '  radicalism  '  Is  rapidly  being  adopted 
by  conservatives.  He  was  one  of  the  earliest  practical  Tax  Re- 
formers and  the  present  Tax  Reform  Association  is  his  work: 
he  was  a  "  back  to  the  land  '  locomotive  before  that  cry  was 
known.  Like  his  '  Single  Tax  instead  of  Socialism,"  his  radical- 
ism Is  tempered  by  a  saving  common  sense." 

A  LITTLE  LAND  AND  A  LIVING 

Shows   what   can   be    done    with    a    little  piece    of   land,    and   how 

those  who  are  unfit  for  the  city  struggle  may  make  a  living  from 

the    soil;    that    agriculture    if    carried    on  along    intensive    lines    Is 

profitable.    A  Message  of  good  cheer   to  the   discouraged. 

LIFE,  LOVE  AND  PEACE 

The  philosophy  of  free  and  joyous  living;  of  being  In  tune  with 
the  Infinite  and  finite  alike.  A  volume  that  points  the  practical 
way  to  health,  happiness  and  content,  which,  in  very  fact,  is  a 
guide  book  to  life  and  love  and  peace.  Mr.  Hall  shows  that  gos- 
pel of  loving  kindness  in  action  for  ordinary  everyday  people, 
who  want  "  the  kingdom  of  heaven  "  here  and  now. 

THINGS  AS  THEY  ARE 

This  collection  of  essays  and  parables  sets  forth  with  a  "  mer- 
ciless sweetness  of  spirit "  the  intellectual  and  moral  entangle- 
ments that  result  from  a  misunderstanding  of  the  Common  Prin- 
ciples of  life.  They  will  not  only  be  read  and  remembered,  but 
unconsciously  incorporated  into  the  life  of  the  reader. 

THE  GAME  OF  LIFE 

This  is  a  collection  of  parables  grave  and  gay  which  have  been 
published  in  "  Life,"  "  Collier's "  and  other  magazines.  The 
Game  as  it  is  played,  with  all  its  possibilities,  is  set  out  In  an 
Inimitable  fashion.  Everyone  who  is  Interested  in,  or  has  been 
puzzled  by  the  muddle  of  life  will  find  in  this  volume  just  what 
applies  to  the  failings  of  his  friends. 

THE  SEEMS  SO  STORIES 

A  book  that  the  child  will  make  his  own,  and  from  which  the 
adult  will  get  many  a  silent  lesson.  The  little  stories  deal  with 
the  things  a  child  knows  in  a  way  that  a  child  understands.  The 
children  ask  to  have  those  stories  read,   over  and  over  again. 

800    pages,    cloth,    12   mo $1.00,  postage  10c 

THE    ARCADIA    PRESS, 

150   NASSAU   ST.,  NEW    YORK 


PRESS  COMMENT 


The  social  and  ethical  ferment  which  is  expressed  in 
"  A  Little  Land  and  a  Living  "  finds  a  more  material  and 
practical  expression  in  the  reborn  earth  hunger.  Mr.  Hall 
has  contributed  to  this  in  his  books  on  intensive  agrictdture. 
The  following  show  the  reception  as  well  as  the  intent  of 
these  books. 


TIMES-UNION,    ALBANY. 

"  Mr.  Hall  gives  all  possible 
suggestions  concerning  ways  of 
working,  time  and  money  re- 
quired, building,  farming  as  a 
profession,  starting  sanitarium, 
animal  raising,  vacant  lot 
gardening  and  garden  buy- 
ing."    *     *     * 

"  An  important  chapter  on 
record  yields  is  included.  The 
book  has  the  approval  of  ag- 
ricultural experts.  It  is  thor- 
oughly practical,  clearly  and 
concisely  written,  and  will  prove 
of  inestimable  benefit." 


JOURNAL,    ALBANY. 

"  Those  who  are  facing  the 
problem  of  rearing  a  family  on 
weekly  wages,  with  employ- 
ment precarious  and  the  con- 
ditions of  life  in  cities  forbid- 
ding and  repulsive,  will  find 
much  in  this  book  to  encourage 
them  to  reach  out  for  a  better, 
saner  living  through  cultivating 
the    little    lands."     *     ♦     ♦ 

"  Men  and  women  of  ample 
means  who  desire  to  aid  those 
in  cities  living  in  hideous  and 
degrading  poverty  will  find 
much  in  this  book  to  teach  them 
what  to  do  and  how  to  do  it." 


ARGUS,     ALBANY. 

"  Mr.  Borsodi  shows  how 
poverty,  vice,  insanity,  miglit 
be  prevented  by  transplanting 
people  who  are  not  fitted  for 
city  life  to  the  farm.  He  shows 
in  vivid  pictures  that  the 
"home"  in  the  largo  metro- 
politan cities  for  three-quartc^rs 
of  their  inhabitants  Is  not 
"  sweet  home."     He  shows  the 


cause  and  points  out  that  Mr. 
Hall's  idea  of  three  acres 
near  the  large  cities  is  the 
real  remedy  for  a  great  ma>iy 
social  evils;  that  the  "  back  to 
the  land "  question  is  the  real 
solution,  though  "  many  men  of 
many  minds  "  suggest  many 
other  remedies."     •     •     • 

"  The  author  of  '  Free 
America '  has  turned  his  eco- 
nomic training  to  immediate, 
practical,  sociologic  reform; 
namely,  the  resort  to  the  re- 
sources of  the  earth;  especially 
In  truck  raising."     •     •     • 

"  If  even  one  per  cent  of  the 
lands  now  held  idle  could  be 
put  to  some  practical  use,  we 
would  have  an  immediate  and 
abounding  return  of  real  non- 
speculative    prosperity."    •     •     • 

"  Those  who  wish  to  learn 
about  intensive  cultivation,  the 
condition  and  possibilities  of 
the  science,  will  find  no  treatise 
but  Mr.  Hall's  and  his  "A  Lit- 
tle Land  and  a  Living "  shows 
what  can  be  done."     ♦    •    • 


COUNTRY  GENTLEMAN, 

Albany. 
"  There  is  more  sense  than 
is  found  in  most  of  the  books 
by  gentlemen  adventurers  who 
have  gone  out  lately  and  dis- 
covered agriculture,  Intensive 
and  otherwise.  As  we  re- 
marked in  our  review  of  'Three 
Acres  and  Liberty,'  Mr.  Hail 
appears  to  have  some  acquain- 
tance at  least  with  the  litera- 
ture of  his  subject,  and  to  en- 
deavor to  present  normal  rather 
than    extraordinary    results." 


EVENING    POST,    CHICAGO. 

"  'A  Little  Land  and  a  Liv- 
ing' by  Bolton  Ilall  is  a  book 
telling  how  the  masses  may  be- 
come comparatively  rich  by  not 
more  than  live  acres.  To  all 
those  millions  of  poorly  paid 
■wage-earners  in  office,  shop  and 
mine  It  would  be  as  interesting 
as  any  novel."     ♦     ♦     • 

"It  is  thrilling  to  one  who 
longs  for  a  free  life  on  the  soil, 
but  has  Imagined  the  small 
farmer  as  living  a  life  of  pen- 
ury."    *     *     * 

"To  make  his  book  of  real 
value  Mr.  Hall  submitted  every 
chapter  to  some  expert  on  agri- 
culture and  he  assures  the 
reader  that  it  is  all  true,  al- 
though it  sounds  almost  as  good 
as  a  wild  cat  mining  advertise- 
ment. Some  of  the  most  start- 
ling stories  of  the  productivity 
of  the  land  when  intensely 
farmed  he  has  taken  from  re- 
ports of  the  United  States  Agri- 
cultural Department;  they  hav- 
ing escaped  the  masses  when 
buried  in  a  governmental  re- 
port."    •    *     ♦ 

"His  book,  and  especially  an 
introductory  letter  by  William 
Borsodi,  which  he  says  brought 
him  to  the  writing,  indicts  ex- 
isting social  conditions  severely, 
arguing  that  the  great  majority, 
especially  in  the  city,  live  lives 
not  worth  living.  With  such  an 
indictment  Mr.  Hall  does  not 
attempt  to  revolutionize  so- 
ciety."  *   *   * 

"He  desires  to  convince  indi- 
viduals that  they  can  do  well  by 
farming  three  or  four  acres  near 
some    town    or    city."     ♦     *     » 

"The  book  is  a  valuable  one. 
There  is  every  indication  that 
It  would  be  among  the  'best 
sellers'  could  it  be  advertised 
in  such  a  way  that  some  idea 
of  its  interest  could  be  con- 
veyed." 


INTER-OCEAN,    CHICAGO 

"An  eminently  practical  book 
setting  forth  the  advantages  of 
a   return   to  the   soil." 


INTERIOR,  CHICAGO 

"This  valuable  little  book  Is 
devoted  to  proof  that  farming 
pays,  In  the  sensible  endeavor 
to  draw  men  and  women  from 
conditions    that    breed    disease 


and  death  in  city  slums  out  Into 
the  pure  air  and  sunshine  of  the 
country."     *     *     * 

"Mr.  Borsodi' s  letter,  which 
caused  the  book  to  be  written, 
de.als  practically  with  the  ques- 
tion, but  Mr.  Hall  takes  up 
the  topic  and  amplifies  it,  giv- 
ing figures  and  statistics  to 
show  how  many  men  and  women 
have  been  able  to  remove  them- 
selves and  pay  their  way,  not 
only  to  decency  of  living  and 
bringing  up  of  families,  but  to 
higher  aspirations  and  nobler 
ideals." 


ISRAELITE,    CHICAGO. 

"  It  is  a  most  cleverly  written 
hand  book  for  the  man  or 
woman  with  little  or  no  prac- 
tical experience  who  wants  to 
get  a  living  from  a  little 
land." 

"  Some  five  thousand  Jewish 
families  are  already  doing  this, 
and  there  is  room  for  many 
thousands  more." 


NEWS,     CHICAGO. 

"It  is  the  practical  side  of  the 
question  that  interests  Mr.  Hall 
and  Mr.  Borsodi,  the  proof  that 
a  man  can  move  himself  and  his 
family  out  of  a  city  slum  and 
bring  them  up  on  a  farm  with- 
out brutalizing  and  degrading 
labor — which  is  too  often  the 
Impression  in  the  mind  of  the 
city    dweller."     •    *     * 

"The  title  indicates  that  not 
much  money  Is  to  be  put  into 
the.  experiment,,  though,  of 
course,  the  more  there  is  the 
better  on  every  account.  But 
there  are  pictures  to  prove  that 
success  has  followed  the  re- 
removal  of  men  without  agri- 
cultural experience,  and  concrete 
instances  are  given." 

"There  is  evidence  to  show 
that  1,300  persons  can  be  fed 
from  an  acre  of  ground  if  its 
resources  and  possibilities  can 
be  realized  to  the  uttermost." 


CHRISTIAN     ADVOCATE, 
Chicago. 

"Mr.  Hall  gives  good  reasons 
for  the  faith  that  is  in  him,  and 
many  who  are  having  a  struggle 
in  the  cities  could  profitably 
act  on  his  suggestion." 


STANDARD,     CHICAGO. 

"In  the  effort  to  turn  the  tide 
which  is  overwlielming  our  cities 
with  unhappy  foll<  while  the 
pleasant  countryside  stands 
smiling  with  opportunities  for 
contentment,  Mr.  Hall  has  writ- 
ten a  book  the  consequence  of 
which  Is  greater  than  its  physi- 
cal dimension's.  It  opens  with 
an  extended  letter  from  Mr. 
Borsodi  in  which  he  sets  forth 
the  allurements  of  the  country, 
offering  peace,  plenty  and  pros- 
perity, buttressing  his  state- 
ments   with    statistics."     *     •     * 

"Mr.  Hall  follows  with  more 
proof  of  a  concrete  personal  na- 
ture, in  which  he  shows  how 
city  mechanics  and  families  by 
no  means  accustomed  to  rural 
life  and  conditions,  have  made 
happy  homes,  giving  photo- 
graphs and  citing  fir.st  hand  au- 
thorities."    *     *     ♦ 

"It  is  a  worthy  book  In  a 
worthy  cause." 


TRIBUNE,    CHICAGO. 

"It  will  not  be  Bolton  Hall's 
fault  if  soon  there  will  not  be 
a  farmer  tenant  on  every  acre 
or  on  every  five  acres  of  land 
in  the  country."     •     *     * 

"The  subject  has  been  written 
up  and  written  down,  but  Mr. 
Hall,  who  is  a  mighty  practi- 
cal man,  tackles  it  anew  with 
the  greatest  enthusiasm."   *  *   ♦ 

"He  is  on  the  right  track,  and 
his  idea  is  gaining  ground  every 
day."     *     *     * 

"Mr.  Hall's  book  should  be  an 
inspiration  to  every  one  who 
is  trying  to  better  the  condition 
of  the  city  poor." 


POST,    CHICAGO. 

"The  book  Is  a  valuable  one. 


CHRONICLE,   CINCINNATI. 

"A  book  with  a  wonderful 
amount  of  information  and  its 
fascinating  dctail.s  woo  strongly 
to   a   country  life." 


ENQUIRER,    CINCINNATI. 

"Based  upon  a  particular  re- 
quest from  Mr.  William  Borsodi, 
the  earnest  and  purposeful  let- 
ter containing  which  has  served 
the  use  of  an  introduction,  a 
new  work  by  the  author  of 
'Three  Acres  and  Liberty' — a 
book  which  has  attracted  strong 


interest  among  socioloarists  and 
others  who  stoutly  retain  faith 
in  the  infinite  conserving  possi- 
bilities of  intensive  agriculture 
— is  here  published."     •     *     * 

"Furthermore,  ho  suggests 
wholesome  ideas  relating  to  the 
tenement  problem  in  this  re- 
gard, which  is  far  the  more  mo- 
mentous side  really,  of  course, 
of  the   general   question."    *   •   ♦ 

"Mr.  Hall  does  not  simply 
theorise.  He  has  accumulated 
from  personal  experience  a  con- 
vincing array  of  facts  corrobo- 
rative of  his  optimistic  asser- 
tions; and,  in  the  cause  he  es- 
pouses, he  writes,  with  the  ex- 
ception mentioned,  well  and 
comprehensively."     •     *     * 

"He  notes  in  the  absurd  di- 
vorce of  our  people  from  the 
soil,  the  cankering  disease  of 
the  nation,  and  rightly  he 
points  it  out  as  the  chief  im- 
mediate source  of  our  constant 
economic    Internecine    conflict." 


HERALD   &   PRESBYTER, 
Cincinnati. 

"The  instructions  and  coun- 
sels and  pleadings  of  the  book 
ought  not  to  go  for  nothing.  It 
is  not  only  a  call  to  better  eco- 
nomic conditions,  but  is  thrill- 
ingly  Interesting  and  attrac- 
tive."    *     »     • 

"This  book  urges  that  people 
should  get  as  directly  as  possi- 
ble to  the  sources  of  all  wealth, 
especially  by  making  a  high 
use  of  the  productivity  of  un- 
used lands  in  or  near  towns  and 
cities." 


AMERICAN    ISRAELITE, 
Cincinnati. 
"It  is  a  most  cleverly  written 
hand  book." 


vl 


JOURNAL  AND  MESSENGER, 
Cincinnati. 

"There  is  sound  sense  and 
genuine  philanthropy  back  of 
such  a  book  as  this."     ♦     *     ♦ 

"It  shows  how  much  of  the 
suffering  and  unrest  of  the 
world  might  be  made  to  dis- 
appear if  people  could  only  be 
gotten  out  of  the  crowded  tene- 
ment quarters  onto  a  little 
piece  of  land  and  taught  to 
till  it  and  make  a  healthful 
living." 


UNIVERSITY  OF  CALIFORNIA  LIBRARY 

Los  Angeles 

This  book  is  DUE  on  the  last  date  stamped  below. 


MAY  151980 


Form  L9-Series  4939 


HD2785.-    H141M 


UC  SOUTHERN  REGIONAL  LIBRARY  FA( 


AA    001  036  462   8 


f  . 


3  1158  00574  8222 


